Start Small, Save Big: Practical Ways to Build Your Savings

Article written by Shelby Anderson, Certified Credit Union Financial Counselor at Adventure Credit Union.

A Savings State of Mind

When you hear the word “save,” what do you think about?  Some common responses I hear from credit union members include:

• "Easy peasy"
• "I see it, I spend it!"
• "Savings isn't something I can ever do"

No matter what you say about it, what is important is that you are thinking about it. 

Why do I need to save anyway?

Having money saved gives you freedom. Want to take that trip or buy that new gaming system? If you’ve been saving, you can get it without stressing over your bank account.

Plus, life happens. Cars break down, medical bills pop up, etc. The last thing you want is to feel like you have to turn to a credit card or loans every time an emergency strikes. Borrowing money often adds stress to an already stressful situation.

A good rule of thumb for an emergency fund is to aim for 3-6 months' worth of expenses. Some of you might read that and say: “yeah right!”  That's why it's important to start small. When you make a goal too large and unattainable, the chances of achieving it are slim to none. The key is just to start saving today, even if it is just a couple of dollars a week. Once you start, you can work your way up!

How do I keep myself from spending it?

Give your savings a purpose. Are you saving for a vacation? An emergency fund? Name your savings account after your goal—seriously, seeing “Hawaii Trip Fund” or “New House Fund” in your mobile app can keep you motivated and remind you what the money is for and what you want to able to do with it. 

What if I don't think it is possible?

Change your mindset. Think of saving like paying a bill, except that bill is you! Set up automatic transfers so a little bit of your paycheck goes straight into that savings before you can even see it. That way, you’re consistent with your savings goal without even having to lift a finger. 

Pick the right savings account

There are so many types of savings accounts that all of have their unique benefits. Find the one that works best for you. A few great examples are:

• Save to Win CD: A one-year certificate of deposit that is unique because it allows you to deposit into it throughout the year and earns higher interest. It also has the added potential to win you money. Win/Win! What I find to be the biggest perk is it locks your money away for the year, so you aren’t tempted to spend it. Sometimes you’ve got to save yourself from yourself. 
• Money Market: You don’t like the idea of your money being locked away? Great, then maybe a money market is for you. You still get the benefit of higher interest, but your money remains accessible. If you need it, you can get to it.  
• Spare Change Savings: If you are tight on cash, this is the account for you. Every time you use your debit card; it rounds up your purchase to the nearest dollar. It then moves that extra change into a savings account automatically. It’s an easy way to save without even trying!

At the end of the day, the best savings strategy is the one you’ll actually stick to. Whether you are saving a little or a lot, the most important thing to do is start. Your future self will thank you!