News & Stories

March 2024

Starting Small Can Lead to Big Savings

When it comes to savings, we all have unique circumstances – in many cases it makes it difficult, or nearly impossible to save. Sometimes the smallest things have the greatest impact, even if it’s just a little bit at a time.

Save for specific goals

Setting specific goals is a good starting point to start saving. You can have a savings plan for future expenses such as education costs, a home or car purchase, starting a small business, or preparing for retirement. Consider setting a goal to build up an “emergency” fund that would cover a few months of living expenses to help get through a difficult time, namely a job loss, major car repairs, or a natural disaster.

Commit to saving money regularly

Any amount you can put in savings will help provide a cushion in the future. Begin with any amount you can afford, no matter how small. Once you see that you can manage your expenses while also saving, try to increase the amount you contribute to your savings at every opportunity.

Put your savings on autopilot

Set up an automatic transfer from a checking account into a regular savings account or an IRA savings account (or both). You can also have your employer direct-deposit part or all of your paycheck into an FDIC-insured savings account. Your employer or your financial institution may be able to set this up for you.

Make use of tax-advantaged retirement accounts and matching funds

Look into your retirement savings options at work, which may come with matching contributions from your employer. If your employer does not have a retirement savings program, consider establishing your own IRA (Individual Retirement Account) with a financial institution and make regular transfers into it.

Separating savings for certain purposes

Consider keeping emergency savings in a separate savings account instead of a checking account, so that you can better resist the urge to raid the funds for everyday expenses. For large purchases that you hope to make years from now, consider certificates of deposit. These generally earn more interest than a basic savings account, because you agree to keep the funds untouched for a period of time.

For future college expenses, look into 529 plans, which provide an easy way to save for college expenses and may offer tax benefits.

Think about ways to cut your expenses

Look at your monthly expenses for everything from food to phones and think about ways to save. Even if you find yourself with very little savings for immediate needs, starting small can move you toward your savings goals. These simple strategies can help you gradually build your savings into large sums.

<Source=FDIC>