How to supercharge your savings
Read: 3 minutes
You've given up the daily $2 coffee and mastered the art of brewing it at home. You've cut your grocery bill by a third by weeding out non-essentials. You're even using those handy "tracking tools" on your credit card account to monitor your monthly spending. Now it's time for the next step: making sure your savings are actually making it into your bank account.
Here are some of the best ways to do that:
1. Automate, automate, automate
"Automation is the new discipline," says Tiffany Aliche, author of "The One Week Budget". She suggests setting your account to automatically transfer a set amount to your savings every time you get a paycheck. The idea is that, by making your savings automatic, you can override your emotions and create a system that works even when you're not paying close attention.
2. Set savings targets and increase them slowly
One of the best ways to motivate yourself is to set small goals, then gradually raise the bar when you hit them. "The key with making small changes is that unspent money needs to be swept away," says Donna Skeels Cygan, CFP. She suggests setting a small goal, such as accumulating $10 in cash in a jar every week. Once you reach the goal, deposit the money, and start again. As you get in the saving habit, you can increase the goal to $20, $30...and beyond.
3. Make savings hard to access
The harder it is to access your money, the higher the likelihood that it'll remain in savings. Consider putting funds into an account that doesn't come with a debit card, or one that's designed for a longer-term investment. "Creating distance from your money makes it inconvenient, and inconvenient money gets distance," says Aliche.
Tiffany Aliche, author of the One Week Budget
4. Segment your savings
To gain a better understanding of your savings and increase your motivation, Aliche suggests creating separate accounts for each of your short and long-term goals. She adds that using categories such "emergency fund," "retirement savings," "car savings," and "vacation" can help keep your goals—and savings—clear.
"Separating your savings will help you avoid accidentally spending money designated for something else," Aliche says. "When you check your account and see your money in its designated savings account, you'll get a quick overview of how well you're doing."
5. Stay connected to your finances
To reach your long-term savings goals, you need to stay on top of your finances. Regularly review your credit or debit card statements to understand where you're spending your money. You can then use those insights to guide your next month's budget.
6. Keep moving forward
Don't lose sight of your goal—or your progress. Commit to the idea of taking one small financial baby step every day—for example, you can read a personal finance article, put aside some money, review your accounts or arrange a meeting with a financial advisor.
Do one small thing every single day, and in a few months, you'll start seeing a discernible difference, says Cygan. "Saving is far more important when working toward financial security than having a high income or any specific investment decisions."
Mridu Khullar Relph is a Chase News & Stories contributor. Her work has appeared in the New York Times, TIME, CNN, and other outlets.