Saving money can feel overwhelming if you don’t know where to begin. You may want to build savings but get stuck on the first steps like choosing a bank or opening an account. Small starts can lead to big transformations when it comes to saving.
With a few simple beginner steps, you can put your savings journey in motion. Here are a few ways you can build good savings habits.
Pick a Bank
The first step is choosing a bank or credit union for your savings account. Look for ones with convenient locations, easy online/mobile access and low or no fees. Credit unions often offer higher interest rates. As finance expert David Bach said, “Make it automatic and put your money where it grows.”
A great place to start looking is GOBankingRates’ Best Banks of 2024.
Open Your First Savings Account
Next, open a savings account at your chosen bank. This keeps your funds separate from checking. Traditional and high-yield savings accounts provide growth while maintaining FDIC protections and liquidity, but your money will grow faster in a high-yield savings account.
As investor Chris Hogan noted, “Having a savings account dedicated solely to your emergency savings allows you to watch your savings grow.”
Make Your Initial Deposit
Seed your new savings account with an initial deposit, even $20 or $50, to start. The first deposit builds momentum and gets you in the habit of consistent saving.
“When you get your paycheck, make sure you deposit money into your savings, too,” said financial guru Suze Orman. “Even if it’s a small amount, get into the habit of saving every month.”
Set Up Automatic Transfers
Arrange for automatic monthly transfers from checking to savings. This builds savings without effort. Even small auto-transfers of $25 or $50 add up over time.
Grant Sabatier, financial freedom coach, said, “I’m obsessed with setting up automatic transfers from checking to investment accounts to mimic the ‘pay yourself first’ mentality.”
Track Your Balances
Download your bank’s app and monitor your savings account balance regularly. Watching it grow keeps motivation high. Some banks offer text alerts when you reach account milestones.
Increase Deposits as Much as Possible
Boost your automated saving amount when you can, even in small increments. Saving isn’t all-or-nothing.
As Orman advised, “Save as much money as you can as often as you can, and don’t stop until you have 6 months of expenses set aside” for an emergency fund.
With a few simple beginner steps, you can put your savings journey in motion. Start small, be consistent and let your money grow.
Gabrielle Olya contributed to the reporting for this article.
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