How Frugal Americans Use Their Checking Account To Minimize Spending and Maximize Savings
Written by
Laura Bogart
Edited by
Kristen Mae
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If you’re like many people, your checking account was one of the first bank accounts you ever opened. You probably never really thought about it after that, other than skimming your balance and hoping it has the number you’d like. However, if you’re frugal, you’ll want to keep it foremost in your mind, because your checking account is a surprisingly versatile financial tool.
To hear experts tell it, using your checking account effectively can help you develop smarter spending habits and learn how to save more. Sound good? Of course it does. GOBankingRates connected with a few of these experts to get some quick and surprisingly simple tips to get more strategic with how you use your checking account.
Automate Your Savings
For Anthony O’Neal, personal finance expert and author of “Take Your Seat at the Table,” one of the smartest things you can do with your checking account is also one of the easiest: automating your savings. He encourages you to set up a high-yield savings account and automate transfers, because automating your savings essentially takes the money out of your hands before you have a chance to spend it.
“This set-it-and-forget-it approach is going to allow you to save consistently and remove the temptation to spend that money,” he said. “Plus, being in a high-yield savings account, you’re earning interest on that money without doing anything.”
Keep a Minimal Balance
On the surface, a checking account with multiple commas might seem like a badge of honor, signaling that you know what you’re doing with your money. Not necessarily, according to Tyler Myer, CFP and founder of Retire to Abundance. He shared that frugal people only keep enough in their checking accounts to cover their monthly expenses, transferring any extra funds to savings or investment accounts that will help it grow.
Find an Account with Low or No Fees
Not all checking accounts are created equal. Some come with extra fees or penalties, like minimum balance requirements or monthly maintenance fees. Not exactly aligned with being frugal, right?
“Every frugal person I know loves a good deal, so why would they pay high fees when there are low or no fee alternatives?” said Myer. “They prioritize accounts with no monthly maintenance fees or minimum balance requirements, avoiding unnecessary charges.”
So, how exactly do you find the banks offering these kinds of checking accounts? Erika Kullberg, founder of Erika.com, suggests keeping an eye out for the latest zero-fee online accounts offered by fintech companies or online banks.
Get Tech Savvy
Kullberg wants you to imagine your checking account as a central hub for everyday expenses, with the spokes of the wheel representing everything you need to budget and save for. Though the wheel is an ancient tool, you should be using modern-day technology, like budgeting apps and investing apps, to help keep your financial development turning steadily.
Connecting these apps to your checking account can give you a bird’s eye view of your spending while allowing you to manage your investments — all in real time.
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