by Emily Hechler 
Saving money is easier said than done. While the financial industry offers many types of accounts, determining the best one for your situation can be difficult. Plus, creating goals and saving for the long-term is challenging. This resource breaks down achievable savings strategies. First, we’ll discuss the differences between Savings accounts. Next, we’ll review some short-term savings strategies, long-term savings strategies, and how to create financial goals. When you reach the end of this guide, you’ll have the knowledge you need to create a saving plan with the right account.
Types of Savings Accounts
Saving money is a habit most people agree is essential. With numerous financial institutions offering various types of savings accounts and products, it can be difficult to understand the differences between them and why there are so many options. Below is a breakdown of some common Savings accounts and how you can use them wisely.
Primary Savings – A Primary Savings account is an excellent starting point for building your savings. At credit unions, members must have an active savings account to hold their $1 share of ownership. This account also provides essential financial tools, including access to online and mobile banking and a network of over 30,000 ATMs. Additionally, you’ll earn interest on the funds you keep in the account every year.
RollUp Savings – RollUp Savings accounts are designed to help you save effortlessly. With every purchase, your transactions are rounded up to the nearest dollar, and the change is transferred into your RollUp Savings account at the end of the day. The money in this account earns interest too, helping your small savings turn into something much larger.
High Yield Online Savings – Available to members with an active Checking account, the High Yield Online Savings account allows you to easily transfer money from your Checking account through online and mobile banking. This account offers a higher yield than the national average, making it a great option for growing your savings for an emergency fund or other goal-oriented account.
Health Savings Account (HSA) – An HSA helps you cover healthcare expenses such as doctor visits, prescriptions, and long-term care insurance. It comes with a dedicated debit card for healthcare purchases. The funds in this account are pre-tax, providing potential tax savings during tax season. You can fund your HSA through payroll deductions, electronic transfers, or in-branch deposits. Even if you think you’re a few years away from significant medical care costs, you can start saving now to plan for your future.
Holiday Savings – The holiday season can often lead to financial strain and credit card debt. To avoid this, consider opening a Holiday Savings account. You can contribute throughout the year like you would to other Savings accounts. In the fall, the funds are automatically transferred to your Checking account, giving you a financial cushion for holiday shopping.
IRA Savings Account – An IRA Savings account helps you save for retirement over time. After accumulating funds in this account, you can open a long-term savings product of your choice, using the money you’ve already saved to earn larger dividends more quickly.
Certificates of Deposit (CDs) – A Certificate of Deposit is a specialized savings product designed to help you save quickly. When you open a CD, you select a term ranging from 3 months to 5 years. Your interest rate is locked in, and your savings compound each month. Once your term ends, you can access your funds or choose to renew your CD to continue saving.
Money Market – Think of a Money Market as a normal Primary Savings account with better perks. The more money you have in the account, the higher your interest rate. If you have a large amount of money you want in a Savings account but also need the funds to be accessible, this is a great option. Here are some tips to help you decide if a Money Market is the right account for you. It really pays to save!
Simple Savings Strategies
It’s easier to save money than you think. Small corrective actions can save you money in your everyday spending. These habits can help lower your cost of living and ensure you are spending your money where it matters the most.
Follow a budget. By creating a budget, you can plan to have enough money to pay your bills, add to savings, and more. When you monitor your spending by following a budget, you can save on your everyday purchases too. If you haven’t created a budget before, check out these four budgeting methods. Keep track of your spending with a budgeting app like Goodbudget and Honeydue.
Automate your savings. As you create your budget, try to include a portion of your income to save each month for future purchases. You can easily put money in your Savings account each month with online and mobile banking. Schedule regular transfers or set up a portion of your direct deposit to ensure your Savings keep growing.
Avoid impulse purchases. Impulse purchases happen when you buy something without planning to do so. Many of us are guilty of making spontaneous purchases while running errands. To help avoid impulse shopping, follow a shopping list when you run your errands. In addition, decrease the amount of time you spend wasting time by walking around stores like Target. It’s easy to make purchases you likely don’t need this way.
Thrift shop. You can find gently used clothing, furniture, kitchen equipment, and more at local thrift stores. Instead of paying full price for a new item, you can pay a fraction for a gently used version. In addition, you’re helping reduce waste in the environment by upcycling.
Monitor your subscriptions. Many of us pay for monthly subscriptions that we don’t use enough to get our money’s worth out of them. Every six months or so, check your transaction history and see what subscriptions you pay for. How often do you use them? It may be time to cancel some subscriptions and use the funds for something else.
Dine out less. Fast food runs before soccer practice and fancy double dates a few times a month can quickly become expensive. By planning meals ahead of time and only buying what ingredients you need, you can reduce the amount of money you spend on food each month. This can be a significant amount if you have a few kids at home too. If you need inspiration for new recipes, try food blogs or Pinterest.
Use your Rewards Credit Card. Rewards credit cards like our Rewards Visa allow you to earn points for every dollar you spend. By using your card regularly, you can quickly earn enough points to redeem merchandise, discounts, or cashback. Be sure to include this in your budget so you don’t have to pay interest fees for not paying your full balance each month.
Couponing Tips
Couponing seems like an idea from last century. However, many retailers today still use coupons to sell specific items at a discount to the customer. By taking advantage of coupons, you can save money on your everyday purchases. The key to saving money is to not use a coupon just because you have it. If you have a family with kids, you can quickly notice a difference if you take the time to find the deals. Here are tips to couponing in the 21st century.
Make time to coupon. If you prioritize making time to coupon, it can pay off. Spend an hour or so each week to potentially save hundreds of dollars. Think of all the time you spend throughout the day scrolling on social media. Use this time instead to look for coupons.
Find coupons. Figure out where to find your coupons. Many times, what most consider “junk mail” is full of coupons for local retail stores. These coupons change regularly, so it’s important to scan each one you think might be a duplicate in case an offer changed since last time. Download the mobile apps of your favorite stores too. They often have digital coupons you can save to your account that will be automatically applied to your purchase.
Take advantage of an overage. One of the best perks of couponing is overage. “Overage” happens when the value of your coupon exceeds the price of the item. That means the store either owes you cash or applies credit to your current bill. You can achieve overage by combining multiple coupons—manufacturer, store coupons, using them on clearance items, applying app points, or even price-matching. Don’t be afraid to use as many coupons as you can.
Goal-Oriented Saving
If you have a large expense coming up or a dream but costly plan for your future, start saving toward a goal. By having a clear plan of how you can save money, your goals and dreams can become your reality without taking on significant debt or struggling financially. Here are the steps you need to start saving toward a goal.
Create your goal. To save toward a goal, you first have to determine what your goal will be. Saving $5,000 just to save $5,000 isn’t very motivating. Putting a purpose behind the money can keep your focused and disciplined to making the goal reachable. Saving $1,000 for an emergency fund or $2,500 for a vacation are a few ideas. Other goals may have set amounts determined by someone else. For example, 20% down payment on a car or a year of higher education.
Calculate how much you need to save. If you currently have money in your Savings account that you can allocate to this goal, subtract this total from your goal. If not, your goal may be clear already. Make sure you research the cost of your goal so you save enough money. Not having enough money saved even though you met your goal will be devastating.
Determine your deadline. This date should be when you need the money in hand, or in this case, in your Savings account. All your money should be saved at this time. Even if you have a flexible target, it’s important to set a competitive deadline to keep you saving over time toward this goal.
Budget your savings. Since you know how much money you need to save to meet your goal, calculate how much money you need to save each month. Slot this into your budget to help you stay on track. You may need to adjust your budget to meet your goal. This is acceptable as long as you make the minimum payments on loans and your cost of living. Meeting your goal might require less “fun” money to spend each month or cancelling unused subscriptions. If you can’t meet these goals in your budget, you might need to be creative with how to save money or adjust your deadline if possible.
Now that you have the necessary steps to save toward a goal, put the plan into action. Set up a separate Savings account for this goal to help you keep track of your progress. Setting up automatic transfers makes this easier too. In addition, you will be less tempted to spend the money when you have a clear view of your progress.
Multiple Goals? Multiple Accounts.
Saving toward a goal is a motivating way to progressively achieve strong financial health. Should you open a separate Savings account? What about when you want to save toward more than one goal? Automated transfers to multiple goal-driven Savings accounts make saving technically easy. Not spending the money prematurely is a little harder. Here are some reasons why you should open a new Savings account for each financial goal.
Have clear focus and progress. Separate accounts for each of your savings goals allows you to clearly track your progress for each one. If you’re saving for a down payment on a car, your child’s college tuition, and an upcoming surgery in one account, you may accidentally attribute money to the wrong goal, skewing your plan. Keeping your accounts separate help you see the progress you have made for each one and how much more you still need to save.
Avoid debt. By saving for projects before you need the money, you can avoid additional debt. Your savings may not cover the expense in its entirety. However, the monthly payments for your loan will be smaller. Opening a High Yield Online Savings account earns more interest than a normal Savings account, which helps reduce your potential debt even more.
Budgeting is easier. Instead of creating one line item in your budget for saving, create a new one for each goal. Vacation savings, new carpet savings, you name it. Dedicate a portion of your budget to each of your saving goals. This will help define why you are saving and keep your motivated to continue.
Less risk for accidental spending. By keeping your goal saving money in the same account as the rest of your daily savings, it can be easy to accidentally spend the money for a different purchase. This can be hard to recover from. Moving this money into a dedicated account will reduce this risk, since it’ll be obvious when you move money out of this account. Many financial institutions allow you to give your accounts unique names, which can help you tell them apart too.
5 Long-Term Savings Strategies
To effectively save money, using short-term and long-term strategies are necessary. Long-term saving strategies can be harder to implement since they require some financial commitment. However, if you start now, your money will have more time to grow over time in various Savings accounts. Here are five long-term saving ideas.
Stick to a Budget. A budget might seem limiting, but it doesn’t have to be. Think of it as a tool to stay organized and make sure your money goes toward what matters most. By following a budget, you can prioritize saving money each month. The small saving steps discussed earlier help too. Using these steps together can help you not spend your entire income each month. If you are saving toward a goal, open a dedicated account and include this in your budget.
Reduce Your Debt. Saving can be tough when you’re paying off multiple loans every month. It’s common to juggle a mortgage, auto loan, credit card payments, and other debts. Larger, stable loans are predictable because you know when they’ll be paid off. Credit cards and lines of credit, however, are more unpredictable. The balance tends to linger unless you make a plan to tackle it. By paying off your debt sooner than later, you can save money on interest fees each month. Strike a balance between paying off your debt and saving for the future.
Open a Certificate of Deposit. Opening a special rate CD can help you save a large amount of money fairly quickly. Since your rate doesn’t change, you can know exactly how much you will have saved at the end of your term. When your CD reaches maturity, you can open a new CD with the savings you just earned.
Start Investing. Investing in retirement accounts now can help reduce potential financial strain down the road. A good rule of thumb is to contribute 15% of your pre-tax income to retirement savings. This can be through your own contributions or the contributions of an employer or match. If you want to diversity your retirement savings, open an IRA with Alltru.
Get Life Insurance. Life insurance often costs just a few dollars a month, but it provides invaluable financial support for your loved ones in times of need. Alltru members have access to affordable term and whole life insurance through TruStage. While it may not be easy to think about, a life insurance plan can ease the financial burden on your beneficiaries, helping them cope with your loss without added stress.
Emergency Fund 101
No matter how much money you save in your everyday life, unexpected situations arise that can cause you to stress. Spending the money you started saving for goals will put you off track. You don’t want to be paying for the situation in five years from now either. The solution is an emergency fund.
An emergency fund is an account you use to pay for emergency situations. This money should be kept separate from your other accounts so you can clearly track your progress. Keeping this money separate also ensures that you will have funds available when an emergency arises.
The purpose of an emergency fund is to avoid financial strain when the unexpected happens. Having money set aside for these situations provides a safety net for yourself and your finances. Many emergencies cost a lot of money. This savings can help avoid the monthly payments of additional loans or credit card bills that may result from the emergency.
Saving $1,000 for an emergency fund is a good starting point. Savings of this size can cover small emergencies. After you save $1,000 in your emergency fund, create a few goal to save even more. A fully funded emergency fund should have around 6 months of expenses saved. This will help keep you afloat if you experience income or job loss. These situations are challenging enough. Not worrying about the short-term care for you family will help reduce some stress and allow you to spend your energy on finding a new source of income.
Everyone defines an emergency differently. According to Ramsey Solutions, you should ask yourself three questions before spending this money. Is the situation unexpected? Necessary? Urgent? If the answer to all three is yes, this is a good time to use the money in your emergency fund. This may be a suddenly broken pipe in your foundation, an emergency room visit, car accident, or other expense. Once the situation is resolved, start contributing toward your emergency fund again.
No Spend-Savings Challenge
Savings challenges are fun ways to push yourself financially. You can use savings challenges as methods to help you meet your saving goals while developing healthy habits.
The No-Spend Savings Challenge pushes you to not spend money on anything (besides your bills) for a period of time. This challenge helps you avoid unnecessary purchases and keep you motivated to grow your savings.
To successfully complete the challenge, you may need to get creative. Breaking impulsive or even normal spending habits is difficult. Find other ways to enjoy your free time besides spending money on a new project or experience. Catching up with distant friends, getting outdoors, and Spring cleaning are a few ways you can pass the time.
Avoid certain triggers. Before you start, try to name the activities that cause you to make impulsive purchases. Maybe it’s scrolling on social media or visiting Target for groceries. Identify what these triggers are so you can avoid them during the challenge.
Don’t forget to eat! Plan ahead your breakfast, lunch, dinner, and snacks before you start the challenge. That way, you can buy the food you need before you begin. This challenge shouldn’t cause you to compromise your health. Purchasing necessary perishables and produce is a free pass during this challenge. For example, if you plan for taco Tuesday, buy your meat, shells, cheese, salsa, and chips ahead of time. You can visit the grocery store to buy items like lettuce and bell peppers during the challenge.
Save for 30 Days
The 30 Day Savings challenges are competitive ways to quickly build your savings. Sometimes, you may even continue implementing changes into your lifestyle! While these challenges aren’t sustainable long-term, it’s fun to push yourself every once in a while to change your habits. Here’s a list of 30-Day Savings challenges.
Spending Freeze – A Spending Freeze is like the No-Spend Challenge. Don’t spend any money besides your bills for 30 days. Make this freeze more impactful by purchasing lower priced alternatives to products you’ll need before you start. Since you aren’t spending money for 30 days, this is a great time to develop new hobbies and enjoy the simplicity life brings when you don’t go shopping.
No Dining Out Challenge – In the No Dining Out Challenge, don’t eat meals from restaurants for 30 days. Dining out gets expensive quickly. By the end of the month, you’ll notice a big change in your spending. Make your snacks and coffee at home to avoid caving and going through a drive-through. You might discover you can go even longer without eating out.
Save $500 in 30 Days – Adding a monetary amount to the challenge can be difficult, but you have a clear result at the end. Saving $125 every week will total $500 at the end of thirty days. You’ll likely have to cut a few activities from your calendar and limit your dining out. Remember, the changes you make should be temporary and put you in risky situations. Do not try to save $500 by cutting your investments or forgoing paying your bills!
New Savings Challenges
Many of the challenges discussed so far have been around for a while. However, newer challenges have started trending on social media. Seeing other people attempt to complete challenges can be motivating for you to do the same. Plus, savings challenges result in extra money in your account. Here is a collection of new savings challenges to try.
100-Envelope Challenge – This challenge became popular on TikTok. It’s a creative way to save a large amount of money – $5,050 to be exact. To start, purchase a folder like this one on Amazon or gather 100 envelopes, and number them 1-100. For the next 100 days, put the corresponding dollar amount into its matching envelope. I suggest jumping around the folder and not doing them in order. Otherwise, you’ll have to save $490 in the final few days, which likely isn’t sustainable.
52-Week Savings Challenge – This challenge is a slower-paced version of the 100-Envelope Challenge. Start by saving $1 in the first week, then add an additional dollar each week. By the end of the year, you’ll have saved $1,378. This is a great way to slowly build your starter emergency fund.
Keep the Change Challenge – This challenge is perfect if you frequently make cash purchases. Pick a time frame and save all your change, coins and bills, whenever you make a purchase. At the end of your challenge, you’ll have a pile of savings to use for other expenses or to save for the long-term. If you don’t spend a lot of cash, open a RollUp Savings account to make this challenge digital.
1% Retirement Challenge – This challenge is a great way to boost your retirement savings without drastically affecting your budget. Start by reviewing how much you’re currently contributing to your retirement account. Then, increase that amount by just 1% each year when you receive your annual increase. For example, if you currently contribute 3% of your paycheck, increase your contribution to 4%. A small change like this can be easy to miss in your everyday spending. However, this small change can grow overtime in your retirement account.
Birthday Savings Challenge – Start by marking important birthdays for the year in your calendar. Decide on the amount you want to save for each birthday. When the big day arrives, send your birthday wishes to your loved one and deposit your savings into your account. You can save a fixed amount, like $15, or save the person’s age in dollars. Birthdays are a great excuse to spend a little extra. Why not treat your loved one and your future too?
Conclusion
Saving money is essential for long-term financial success. Whether you have short-term or long-term plans for your money, it’s key to use the right account that aligns with your strategies. Some changes are easier to make, such as short-term adjustments or habits. Other efforts, like budgeting and saving for retirement, take time and disciple to yield results. Whatever your goals may be, opening a goal-oriented Savings account can keep you on track. To make saving money more exciting, ask a friend to complete a savings challenge with you. Saving should be celebrated, and we’re here to do that with you. Ready to start saving? Visit Alltru to open your account.
