Healthy Savings Habits

The first step to successfully saving money is to track your spending habits. That means anything you spend money on from groceries to rent payments. You could organize it by categories to track spending by week or by month. Moreover, it may be helpful to organize your expenses into two categories, variable (expenses that change) and fixed (expenses that don’t change). Once you have an idea about what you spend on everything monthly, you can create a budget. ​

In order to successfully create a budget, you must know how much is coming in (income) versus how much is going out (expenses). In general, you should try to put away between 10 and 15 percent of your income. Refer to this Budget to access a sample budgeting worksheet.

You should start by looking at the variable expenses accrued each month. Some strategies to cut back include: eating out less and cooking more, canceling unnecessary subscriptions that renew each month, and attending inexpensive entertainment options (free concerts, street fairs, etc.). In order to save on fixed expenses, think about changing things like your cell phone carrier or health care plan. 

To create healthy savings habits, it is a good idea to start by putting between 1 and 5 percent of your monthly income into a savings account. This is a good first step and if you feel you are able to deposit more into savings, feel free to do so. ​

To continue creating healthy savings habits, it is important to open a separate savings account that holds ‘untouchable’ funds. Often times, banks will require a minimum deposit in a savings account to open the account. For example, if you open a savings account with Bank of America, you will need an initial deposit of $500 to open the account. If you end up removing funds from the savings account and dip below the required amount, the bank may charge you a fee. 

Setting up automatic transfers between your checking and savings accounts is one of the easiest ways to begin saving money. You can choose what portion of your paycheck is sent to your savings account. The easiest way to set this up is to create an online account with your bank, either through the banking app or on a computer. 

Once you have set up your savings account and automatic savings deposits, you can continually check your savings account to see how much money you have accumulated.