There is a simple and essentially surefire way to quickly build up your cash — yet 69% of Americans ignore it.
Setting up automatic transfers from your checking account to your savings account is one of the best ways to fatten your cash reserves.
Women are slightly less likely than men to set up automatic transfers — 72% of females do not use this tool, while that’s true of 65% of men. And millennials are especially likely to skip this method, with 76% failing to set up such transfers.
As we noted in “7 Proven Ways to Supercharge Your Savings Today,” the technique of automatically transferring money into a savings account — often referred to as “paying yourself first” — is something almost anyone can do.
As GOBankingRates suggests, you can schedule money to periodically and automatically move from your checking to your savings account.
Or — as we have suggested — you can have money diverted directly from your paycheck into savings:
“Payroll deduction is among the best fixes for struggling savers. With this approach, you have money automatically taken from your paycheck and transferred to a savings account or retirement account. Your employer may even allow you to directly deposit paychecks into multiple accounts.”
More ways to boost your savings rate
Today’s savers are also missing other opportunities to sock away cash. For example, the GOBankingRates and CIT Bank study found that a scant 6% of survey respondents have a high-yield savings account.
By not comparing rates from time to time, you could be missing one of the easiest ways to boost your savings.
The current national average interest rate among savings accounts is a measly 0.1% APY, according to the Federal Deposit Insurance Corp. But there are banks paying upwards of 20 times more.
CIT Bank, for example, currently offers a rate as high as 2.45% APY for savings accounts. To learn more about it, check out “Earn 20 Times More on Your Savings Now.”
Finally, remember that to earn more on your money, it helps to understand a little financial lingo. And we promise, that’s not nearly as scary as it sounds.
So, if you saw the term “APY” above and started scratching your head — or if any other commonly heard financial word has you puzzled — check out “14 Financial Words You Need to Understand.”
What steps have you taken to boost your own savings rate? Share your insights in comments below or on our Facebook page.