How to manage your money with a savings plan | finder.com
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How to manage your money with a savings plan

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Develop a realistic plan to achieve your financial goals.

You don’t need have a high income to have financial goals with a savings plan it’s possible to go on that vacation you’ve always dreamed of without getting into debt or put a down payment on a new home. It may take a few months — or years, but if you follow a plan you could be on track to the financial future you want.

How do I set up a savings plan?

Once you determine what you want to save up for, You’ll need to work out how you’ll save and where. Here are six steps to help you set up a savings plan:

Step 1: Work out how much money you need to save

Whether it’s a summer backpacking across Europe or a down payment on a house, you probably need a decent amount tucked away. Figure out exactly how much you need to save to meet your financial goal.

Step 2: Decide how long it’ll take to save up

Once you’ve arrived at a lump sum, determine how long it will take to save that amount depending on your income. For example, if you plan to save $10,000 to take a vacation within the next two years, then you should save about $416 per month. This amount could be a bit less, thanks to compound interest, but it’s better to run a bit over than a bit under.

Step 3: Identify what type of savings account you want

To get the maximum annual percentage yield (APY), you need to set up the right account. The two main types of savings accounts are:

Regular savings accounts Online savings accounts
Features
  • Branches available if you want in-person help
  • Can easily be linked to a checking account at the same institution
  • You can deposit cash
  • Usually offer much higher interest rates
  • Can easily be linked to a checking account at the same institution
  • You can easily transfer money between accounts online
Works best for
  • People who are more comfortable banking in person
  • People who prefer to work with cash
  • People who want the most competitive interest rate
  • Tech-savvy people who are more comfortable banking online

Step 4: Choose a 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.
PNC Virtual Wallet
PNC Virtual Wallet
$7 per month
(can be waived)
$25
2.35%
PNC High Yield Savings account
PNC High Yield Savings account
$0
$0
$1
2.35%
An online savings account designed to work harder to help you achieve your financial goals.
$0
$5
$100
2.10%
An Alliant Kids Savings Account is the perfect teaching tool on how to set savings goals.
$0
$0
$0
2.00%
A high-interest, fee-free online bank account that helps you save.
$15 per month
(can be waived)
$100
$0.10
1.85%
An account that grows with you.

Compare up to 4 providers

Name Product Fee Minimum deposit to open Minimum balance to earn interest Interest rate (APY)
$0
$0
$1
2.10%
Enjoy no monthly fees and a competitive APY with this online-only savings account.
$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.
$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
$0
2.25%
Earn one of the highest interest rates without the fees.
$0
$0
$0
2.20%
Earn 20x the national savings account average with no fees or minimums.
$0
$0
$0
2.10%
Take advantage of a high-interest online savings account with a 2.10% APY, $0 monthly fees and more.

Compare up to 4 providers

Quick tip

Talk with your finance or HR department about having a portion of your salary deposited directly into your savings. You’ll never see the money, so you won’t miss it. You can also set up your checking account to automatically send money to your savings account monthly.

Step 5: Create a budget

Working out a budget helps you stay on track to savings. Start a budget with these tips:

  • Calculate your income. From your salary and investments to side jobs or child support, work out how much money you earn each week.
  • Calculate your expenses. Work out how much money you spend each week and on what groceries, rent or mortgage payments, gas, credit card payments, electricity, entertainment and more. Keep a running total of every expense for a couple of weeks to make sure you don’t miss anything. If you bank online, take a look at your recent transactions to help.
  • Assess your expenses. Which of your regular expenses are essential and which are not? Are there any costs, like entertainment, eating out or traveling, that you can reduce or eliminate? Even necessary costs, like groceries, can sometimes be tightened up a bit by switching brands or watching for sales.
  • Create a budget. Start by budgeting for fixed necessary expenses like your rent or mortgage, credit card payments and student loans. With the money left, decide how much you need to spend on your flexible necessary expenses like groceries and toiletries. Finally, Decide how much of your remaining income you’re willing to spend and how much you want to save, and then trim away at your expenses until everything fits in your budget.

Step 6: Check your progress regularly

Monitor your weekly spending to see if you are sticking to your budget, and make sure to adjust it whenever your financial situation changes. Review your budget periodically to see if you can divert more to savings than you originally thought. For example, maybe you can:

  • Sell things you don’t use. Examine your living space and gather all the things you haven’t touched in a year. Have a garage sale or list them on a site like Craigslist — and then send that money to your savings account.
  • Cut down on entertainment costs. Try to limit yourself to one TV subscription service and decide ahead of time how much you’re willing to spend — and then stick to it. Host movie nights at home instead of going to the theater or skip trivia at the bar in lieu of a game night with your friends at home.
  • Do some basic energy efficiency installation around your home. This includes changing light bulbs, updating your heating and cooling systems if possible and putting sticky notes up if you need to remind yourself to turn off light switches and unplug laptops at night.
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How do I stick to a savings plan?

Many of us start out with plenty of ambition and the best of intentions, but within a couple of weeks our carefully crafted savings plan has fallen by the wayside. However, there are a few key things you can do to ensure that you stick to your plan.

  • Tell your family and friends. You’re far less likely to just give up on your dreams if you’ve shared them with someone else, and you’re likely to get extra motivation if your commitment starts to waver. Plus, you might even have some friends who are trying to save too.
  • Review your progress. Check periodically if your plan is working and if you’re headed to your goal or if you need to adjust. Even a peek at the bank balance you’ve built can provide a huge confidence boost.
  • Check with your bank. Your bank might be able to help you manage your accounts. You could set up an automatic savings plan that takes money from your checking to deposit to your savings. Or a bank could offer accounts with a high APY with compound interest to help your money earn more money while you save.

Bottom line

Keep your eye on the prize when it comes to savings. That dream home or trip across Europe was the reason you developed a savings plan in the first place. Compare savings accounts to find the best way to save your money.

Frequently asked questions

Picture: Shutterstock

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Shirley Liu

Shirley Liu is Finder's global program manager. She was previously the publisher for banking and investments and has also written comparisons for energy, money transfers, Uber Eats and many other topics. Shirley has a Master of Commerce and a Bachelor of Media, Journalism and Communications from the University of New South Wales. She is passionate about helping people find the best deal for their needs.

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