How to start saving for your future | finder.com
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How to save more money for your future

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Saving money doesn’t have to be hard, especially if you make smart financial decisions.

Despite your best efforts and intentions, sometimes bills pile up, emergencies happen and it can feel impossible to save enough to make a difference. Thankfully, with some tweaks to your finances and the help of a few tools, building up your savings doesn’t need to be painful.

Our top pick: American Express® Personal Savings High Yield Savings Account

  • 2.10% APY
  • No monthly fee
  • No minimum balance

Our top pick: American Express® Personal Savings High Yield Savings Account

Enjoy no monthly fees and a competitive APY with this online-only savings account.

  • Around-the-clock online and phone support
  • No fees to hassle with
  • FDIC insured
Promoted

6 steps to start saving

Saving doesn’t mean that you have to give up on the good things in life. While some sacrifices are necessary, a proper balance between spending and saving will result in extra money for you and greater financial security for your family.

  1. Open a savings account. Look for high-interest savings accounts with zero fees. Digital banks tend to be more competitive than traditional banks because they don’t have to deal with the costs of keeping branches open.
  2. Make a savings goal. Start off with a few short-term goals, then develop those into long-term goals. Set goals that are easily achievable to start saving responsibly, then move on to goals like saving for a car or a down payment on a home.
  3. Pay yourself first. One of the easiest ways to save money is to never see it first. Divert a portion of your paycheck automatically into an account that’s not tempting to access. Some suggestions are:
    • Straight into your mortgage, personal loan or credit card account. If you have debts, send a portion of your bank account each month to pay them down — and not just the minimum payment.
    • A high-interest savings account. Preferably one without a debit card, so it’s a little more difficult to access your money when you’re feeling spendy.
  4. Spend less than you earn. One of the biggest downfalls is using more money than you have. Live within your means and avoid borrowing whenever possible to stay financially healthy.
  5. Be consistent and save regularly. Create a habit of setting aside money in regular intervals. Even small amounts set aside habitually can create a comfortable nest egg for you. Automated tools like Digit, which calculates how much you can afford to save and moves money to your savings when you can afford it, make saving easier.
  6. Start a side hustle. One way to build up your savings account is to spend a few hours per week at a part-time job — such as dog walking or babysitting — and put 100% of that money into savings.

Are you self-employed or freelancing?

Decide on a portion of earnings that you’d like to manually deposit into a savings account each month and make sure you stick with it.

Our top pick: American Express® Personal Savings High Yield Savings Account

  • 2.10% APY
  • No monthly fee
  • No minimum balance

Our top pick: American Express® Personal Savings High Yield Savings Account

  • Around-the-clock online and phone support
  • No fees to hassle with
  • FDIC insured
Promoted

Compare savings accounts

Name Product Fee Minimum deposit to open Minimum balance to earn interest Interest rate (APY)
$15 per month
(can be waived)
$25
$0
2.40%
Earn one of the highest annual percentage yields (APYs) if you live in one of 42 eligible states, and access your money by ATM, check or bill pay.
$0
$0
$1
2.10%
Enjoy no monthly fees and a competitive APY with this online-only savings account.
$5 per month
(can be waived)
$0
$0
0.01%
Get a $150 bonus when you open a new Chase Savings account, deposit a total of $10,000 or more in new money within 10 business days and maintain a $10,000 balance for 90 days.
$0
$1
$1
2.29%
A first step in helping you build a free financial plan for the life you want and automate your investments at a low cost.
$0
$100
$25,000
or set up a direct deposit of $100+ each month
2.45%
A super-high interest rate if you're in the habit of saving at least $100 per month or have $25K in the bank.
$0
$1
$0
2.30%
Get one of the highest interest rates available without high balance requirements or fees.

Compare up to 4 providers

Plan for the future

You can’t plan for everything in life, but you can save for a financially stable future. Working on long-term goals as soon as possible will help you have a smoother financial path down the road. A few ways to do that are to…

  • Work on your credit score. A high credit score means that when it’s time to make big purchases — like a car or home — you can take advantage of the lowest interest rates. This can save you tens of thousands over the life of a 30-year loan. If your credit score is low, look into credit repair options.
  • Start planning for retirement. There’s no such thing as starting your retirement planning too early. It takes decades to save up enough for retirement, and if you start too late, you could end up in major financial trouble when you’re older. Diversify your retirement savings so that if one plan fails, you have a backup.
  • Get a good life insurance policy. Make sure you get a policy that isn’t tied to your employer — if you stop working for them down the line, you could be paying into the policy for nothing. Also, know the difference between a term life insurance policy and whole life insurance.
  • Adjust your tax withholding. While getting a big refund every year around tax time sounds fun, the truth is that you could be paying the government a lot more than you actually owe. Take a look at your W-4 to see if you’re claiming all of the allowances you’re entitled to. If not, update it and use the extra money each month to add to your savings.

Calculate how much you’d need to save to achieve your plan

Protect yourself

You can plan to retire. You can plan for tax season. You can even plan for death — but you can’t plan for everything. You can, however, take steps to prepare yourself for the unexpected so you don’t get permanently knocked down when you hit an obstacle.

Have an emergency fund

Unexpected medical bills, losing your job, a house fire, a broken car, a last-minute plane ticket to see a sick relative — there are endless potential emergencies that could crop up and eat into your savings. If you don’t have enough to cover those emergencies, you could end up with overdue bills and plummeting credit.

Make sure you have enough to cover any emergency that might come up — enough to live on for nine months is recommended, but if that’s not possible, do what you can.

Avoid taking on any more debt

Small amounts of debt are unavoidable — like a mortgage or that bit of credit card debt that carries you over until payday. Once debt starts piling up, though, it can be hard to dig yourself out. If you can avoid going deeper into debt, like deciding not to take that personal loan to go on a vacation, do so.

Try and master the 30-day rule, which challenges you to wait 30 days before making a purchase. Often, you’ll find that if you wait a month to buy something, that urge will have dissipated by then and you’ll save money.

Currently have a personal loan, credit card or home loan?”

Try and make more than the minimum monthly payments. Since interest is calculated based on your daily amount, the faster you can reduce your principal, the less you have to pay.

Make sure you have health insurance

The cost of health care in the US is astronomical, and a simple ER visit can cost thousands. Without health insurance, a serious illness or injury can costs tens or hundreds of thousands. If you’re having trouble avoiding premiums, look into government assistance in your state.

Keep your finances healthy

One of the most important tips for saving money is to know where your money is going. If you don’t stay on top of your finances, small purchases can eat away at your checking account, leaving you with nothing left to save and no idea where the money went. Here’s how to keep your finances healthy:

  • Learn how to budget effectively. Setting a budget and sticking to it is one of the best things you can do for your finances. Not only does it help you figure out how much you can set aside in your savings account each month, but it’ll help make sure you don’t end up with overdue bills that hurt your credit and turn into debt.
  • Regularly check your bank accounts. Checking your bank balance regularly is a good habit to get into. Knowing how much money is in your account is useful when formulating a budget, and knowing how much should be in your account will make it easier to spot any suspicious charges or bills you might be overpaying.
  • Get financial advice. Getting the right kind of financial advice can really make a difference and give you the confidence you need to meet your financial goals, whether it’s a financial planner or a robo-advisor.

Financial planners can help you:

  • Set and achieve your financial goals.
  • Make the most of your money.
  • Get any government assistance you’re entitled to.
  • Feel more in control of your finances and your life.
  • Avoid expensive mistakes.
  • Protect your assets.

Watch out when paying with credit

Many financial companies and banks give you the option to borrow from them. Credit cards are there to pay for goods or services and you can take out loans for bigger purchases like cars, homes and even a start-up fund for your business.

The downside of credit and loans are the charges that come along with them. Your monthly payment comes with interest, which can add up over time — especially if you miss a payment and end up needing to pay late fees.

If you struggle to keep your credit card spending under control, consider using the card for emergencies only and carry cash on you for day-to-day purchases until you get used to sticking to a budget.

Invest your money

While there’s a degree of risk involved, making smart investments can help you grow your money significantly. A few of your many options are:

  • Investing in things that increase in value over the years. Jewelry and art often increase in value over time, making them a great way to diversify your investments. Toys and memorabilia have the potential to increase drastically in value, but they’re a much riskier investment — in 20 years, they could be incredibly valuable or they could be worth nothing.
  • Investing in real estate. If you buy a second home or an apartment complex that you can rent out, that will be a stream of income when you retire. Whereas your savings account will slowly start to deplete after you stop working and adding to it, a rental property will continue to bring in money each month even as it accrues value.
  • Investing in a business. Starting a business allows you to be your own boss, giving you the freedom to implement ideas that will generate profit. Once a business has become established, it very nearly runs on its own, giving you the time and the wealth to enjoy the rest of your life. If you like the business world but want a more hands-off approach, you can also be an investor in someone else’s business.
  • Investing in yourself. You can help increase your market value by taking time to learn more. You can go back to school or attend classes that can help you be more knowledgeable in your chosen field and increase your potential future earnings.
  • Automating your investments. Set your investments up so that a percentage of your paycheck is deducted and redirected to a diverse investment portfolio each month. This is the best way to make sure that your investments grow over time and you’re financially stable when you’re ready to retire.

Bottom line

Saving can be difficult, especially when you think about how much it costs to make a big purchase or even retire. However, taking small steps to stash money away in a savings account every month can start to add up to major savings after a few years. If you make smart financial decisions and turn budgeting and saving into a habit, future you will be grateful.

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