Retirement Income

Save Money In Ways You've Never Thought Of Before With These 5 Tips

Save Money In Ways You've Never Thought Of Before With These 5 Tips

It can be tricky knowing when to get started, especially when you don't know where to begin. These tips aim to help you get started.

1. Find your hidden savings accounts

Take your savings wherever you find them, even if they aren't in the bank.

"You can definitely start with the change in the middle console of your car," said Sheldon Crow, branch manager at Bellco Credit Union in Arvada, Colorado.

"If it works for you, that is a savings account."

Guys who toss their pocket change each night into a jar or drawer may be astonished at how much they've piled up in change.

Do you have gift cards lingering in your wallet, a pile of tips you haven't bothered to deposit, store credit, a cash-back account you're ignoring, or a reloadable charge card you forgot you reloaded?

Maybe you let your PayPal or Venmo account balance increase whenever you sell something on eBay or a friend pays you back for a night out.

Honor your cash-stashing habits as creative ways to save money, whatever they are.

2. Pick an inconvenient bank

It's great to do all your banking in one place, especially if you bank online.

But when the money you saved is just a few keystrokes away, even determined savers can give in to the temptation to make a quick transfer to cover a bill, or withdraw savings from the ATM "just this once."

So make it a challenge to access that money.

Deposit savings in a different institution from your everyday accounts.

Shred the ATM card so you have to bank in person.

Pick one that's far away from your home or work, with inconvenient hours.

Choose a bank that charges big fees for withdrawals or a brokerage that makes you wait 48 hours for a transfer. 

3. Pay it off—but keep paying in

If you're finally making your last car payment, or paying off a credit card or a student loan, avoid the temptation to bump up your spending or accrue new debt.

Instead, divert into savings the same amount you've been paying all these months.

Such money-saving tips don't change your standard of living, so you won't notice any difference in your budget, but you'll be paying yourself instead of a creditor. 

4. Set aside a portion of every windfall

Congrats, you got a bonus (or a big tax refund or a check from a relative).

Good for you! Use this rule of thirds: Put one-third into savings, one-third to reduce debt, and the final third to spend on something wonderful for yourself.

Don't save the whole amount, which will make you feel virtuous, but deprived.

This plan gives you balance—you allocate some of your unexpected cash to the past (paying off debt), some to the future (saving), and the rest on a present for yourself. 

5. Open a roundup savings account

Understanding that people need encouragement to save, the financial industry came up with a clever and painless way to do it: automatic savings.

Every time you use your debit card to make a purchase or pay a bill, these accounts round up the purchase amount to the nearest dollar, transfer the difference from checking to savings, and keep track of how much you're putting away.

It's just like your change jar, only virtual.

Bank of America calls their product the "Keep the Change" Savings Program, and many banks and credit unions offer something like it.

Written by Lisa Greim. This article first appeared in Reader’s Digest. For more of what you love from the world’s best-loved magazine, here’s our best subscription offer.