Wouldn’t it be great to look at your bank account and see an extra $1,000 sitting in there? Unfortunately, that extra $1,000 is a big struggle for many Americans. According to a GoBankingRates survey that polled 8,000 people, 57 percent had trouble putting away $1,000 in their savings or emergency fund.
Does this sound familiar to you? If it does, make saving $1,000 a goal this year. Once you reach $1,000, you should keep saving and, if you can, increase the amount you’re putting away each month, since $1,000 is not nearly enough to cover living expenses for three to six months or an unforeseen emergency.
Build your wealth and let your savings give you the freedom to live your life without fear of losing your job, or having to suddenly part with a large amount of cash because of a medical bill.
Here are five budgeting tricks that can help you save $1,000 this year.
1. Write down your savings goal for the year and set daily reminders
When you write something down, it helps your brain process it on a deeper level. But, don’t just write it down, create reminders so you stay motivated to reach your goal. Try posting sticky notes on your fridge, desk, or bathroom mirror, so you can see it every day.
As with any changes you make in your life, set a goal, write it down and be intentional about it. Write down in a notebook or start a simple Excel spreadsheet with the goal of saving $1,000.
Then set a timeline for how long it will take for you to get there. The goal is to be able to do this in six months or less.
2. Never forget that your money can make you more money
Finding the best place to park your cash is crucial. Look out for the best checking and savings accounts that can earn you some passive income in the form of interest.
Consider opening a savings account from Radius Bank, which currently offers 1.30% return on your money. That’s 18x more than what the big banks offer, plus it doesn’t cost anything to open an account.
Radius Bank also has a solid checking account. It’s called Radius Hybrid and also earns an APY that’s 18x the national average for checking accounts.
Both the checking and the savings accounts from Radius come with a free management tool to help you better control your finances. It lets you link to other accounts (that are not with Radius) to do things like calculate your net worth and create a budget. You can even see your spending trends over time and learn how to pay down debt.
Here are Radius Hybrid details:
- Earns 1.00% APY on balances of $2,500 and up
- Rate is not introductory (like many others in the market) and there’s no cap on balances that earn the rate; balances are also FDIC-insured up to $250,000
- No monthly fees
- No minimum balance requirements
- Unlimited ATM fee rebates
- Mobile payment options (Apple Pay, Google Pay, Samsung Pay)
3. Set it, but don’t forget it
After you open an account with Radius, make sure to automate your savings and set a date each month to move money from your checking into your savings account. Radius lets you do this directly from your account!
Set the date for one day after you get your paycheck, so you don’t see the money sitting in your account.
Creating an automatic savings is more mental than anything else. When you don’t see the money in your account you’re less likely to spend it.
You can even take it one step further and set your paycheck to automatically deposit a portion of your paycheck directly into your savings account, rather than having all of it go into your checking first.
Either way, creating an automated system for saving is crucial because it will force you to save each month.
4. Budget and use the envelope system to cut back on spending.
This isn’t so much a mental trick as it is an actual budgeting tactic that works.
The envelope system is a cash-only method to control your spending. You create spending buckets and allot enough cash in each envelope. Once that money is gone, that’s it, no more spending until you replenish the envelopes for the following week.
Increasing your savings each month means you need to cut back on some spending.
Start with the easiest things to cut, such as eat out at restaurants, trips and shopping. Cancel all unused subscriptions and use an app like Trim to help negotiate lower bills for you.
Then set a spending budget for yourself for the week.
5. Mental Note to Remember: Always Pay More Than the Minimum Balance on Credit Cards
There are many schools of thought when it comes to paying off your debt first and then saving.
Some experts believe you should get rid of debt first because the interest on the debt will eat into whatever savings you have. Others think it’s reasonable to both pay off debt and save, since having liquid cash on hand is really important, in case of an emergency.
If you choose to do the latter, make sure to always pay more than the minimum balance on your credit cards. You can always adjust how much you’re saving each month, if you need to pay more on your cards.
It really doesn’t matter what your strategy is, as long as it works for your lifestyle and budget, and you’re meeting your financial goals.
Saving $1,000 is just the beginning. Use Radius’ financial tools to check your net worth to keep motivated because it’s not about how much you spend, it’s all about how much you keep.