The personal savings rate may be rebounding slightly, but there is little doubt most of our emergency funds could use a boost.
According to the Bureau of Economic Analysis, Americans socked away 3.9 percent of their disposable income into savings in December. That’s a vast improvement from the 2 percent we saved in May 2005, but a far cry from the double-digit rates in the 1960s and ’70s.
So how do we save more? Yes, we all know we should cut cable and drop the morning mochas, but those suggestions seem like work, right?
Rather than make savings a chore, make it a game instead.
Here are six ways to play the savings game:
1. Take the 52-week savings challenge
If you have a Facebook account and more than 10 friends, you probably saw this one floating around the social media world in December and January.
The idea is simple: Save a dollar for every week of the year. So the first week, you put $1 aside, the second week it’s $2, and the last week of the year, you save $52. Make sense? By the end of the year, you should have $1,378 in the bank, maybe a little more if your savings account gives you a smidge of interest.
Of course, you can always customize this. Maybe you want to double the amount and do $2 for Week One, $4 for Week Two and so on. Or if you’re worried about running out of steam by the end of the year, you could start with $52 for the first week and then work your way backward.
2. Keep your own change
For those using a cash envelope system, limit yourself to only spending your bills. Put your change in a jar and then roll it up at the end of the month and deposit it in your savings account.
If your finances allow, you can take this savings strategy one step further. Spend only bills that are $5 or larger, and put the $1 bills in your savings change jar too.
3. Make money disappear from your checking account
You can try the same strategy even if you don’t use cash. Some banks offer options that essentially do the same thing as placing your change in a jar. For example, Bank of America’s Keep the Change program rounds up debit card purchases to the next dollar and then transfers the change to a linked savings account.
You don’t need a special bank program to do this either. As you record your daily transactions, round them up to the nearest dollar or, if your disposable income allows, the next $5. At the end of the month, when you reconcile your bank account (you do balance your checkbook right?), transfer all the extra money to your savings account.
4. Put your coupon or sale savings in the bank
Who can resist a great deal? The next time you score an awesome price, put the difference between the regular price and the sale price in the bank.
Do the same with your coupon savings at the grocery store. Many retailers will even very conveniently include your total savings on your receipt.
This strategy can have the double impact of not only helping you save more but may also lead you to shop less. After all, those $50 jeans are still going to cost you $50 in the end. This strategy can help you decide if something is really worth spending money on.
5. Never get a raise again
Another painless savings strategy is to bank all of your raises. If you can pay your bills on your current income, you can simply send all that extra money straight to savings. The same goes for bonuses, cash gifts or other unexpected windfalls.
This method is especially easy if your employer allows you to directly deposit your paycheck to multiple accounts. Direct deposit the raise amount to your savings, and you’ll never miss it. Then, when your furnace gives up the ghost or it’s time to take that cruise, you’ll have a nice sum of money waiting for you in the bank.
6. Make saving automatic
Speaking of direct deposit, automatic savings is absolutely the way to go if you find yourself struggling with the self-discipline to save on your own.
Online banks, in particular, can be good places to park money, and some institutions automate the savings process. For example, CapitalOne 360 allows users to set up an automatic savings plan in which automatic payments can be pulled from your primary checking account to your online savings account on a customized schedule.
Saving money is, of course, easier if you have more money to play with. Watch for a future article in which we’ll talk about some of the easy ways to rein in your shopping habit.
In the meantime, tell us what you do to make sure your piggy bank is being fed on a regular basis. You can comment below or head to our Facebook page to connect with other Money Talks News fans.