Having a healthy savings account is important no matter what point you’re at in life. But building up that account, especially in the face of inflation and the rising costs of goods and services, can be a challenge.
In fact, according to a recent survey from Prudential, over half of the almost 4,800 consumers surveyed had less than $500 saved up—or no savings at all.
If you’re in a similar boat, there’s still hope. Here are eight ways to get your savings efforts on track—and fast.
8 ways to save money quickly
There are many ways to increase your savings rate—and some of them require just a simple change in habits, like reducing certain expenses or changing where you stow your money. Finding ways to increase your income—even slightly—can help too.
1. Change bank accounts.
One of the biggest benefits of a savings account is that it allows you to earn interest on the money you save up. Interest rates can vary widely from one institution to the next, though, so you may be able to increase the rate at which your money earns interest—and how fast your balance grows—just by switching banks.
“it can be a hassle to switch banks now that most everyone has automatic paycheck deposits and bill payment set up on their existing accounts,” says Liz deSousa, a certified financial planner and senior financial adviser at Running Point Capital Advisors. “But the time and effort spent switching banks and reestablishing auto deposits and payments is often worth it for the positive impact on your savings.”
Opening an online savings account can be beneficial too.
“If you don’t want to switch banks, I’m a fan of having an online savings account in addition to the traditional brick-and-mortar checking and savings accounts,” deSousa says. “Online banks can offer higher interest rate yields because they don’t have the expense and overhead of managing traditional bank branches. They’re a great place to park excess cash and save for the long term.”
Some banks also offer bonus cash and other incentives for new account holders. These provide yet another way to boost your savings.
2. Be strategic with your eating habits.
Changing the way you eat—and shop for your meals—can help you save more. Data from the U.S. Department of Agriculture shows that most people spend over 10% of their disposable income on food—almost half of that eating out.
“One common area that many people overspend on is going out for dinner,” says Stuart Boxenbaum, a certified financial planner and president of Statewide Financial Group.
If you’re someone who orders in or eats out often, creating a detailed meal plan and some strategic grocery shopping can help you cut back on this habit—and, more important, increase the amount of cash you have to save.
“One of the easiest ways for consumers to save money fast is when grocery shopping,” Boxenbaum says. “Wherever you buy your groceries, there are always two choices available: name-brand or generic. If you check the ingredients and know you are getting the same basic item, you can typically save 25% to 33% or more by buying the generic version. This can really add up fast.”
3. Change up your insurance.
Insurance premiums can take up a significant portion of your income. The average home insurance premium is nearly $1,300 annually, and the average car insurance premium is just under $1,200. Fortunately, there are ways to reduce auto insurance costs and free up more money to put away in savings.
One option is to increase your deductible. According to the Insurance Information Institute (III), increasing your car insurance deductible from $200 to $500 can reduce your premium by up to 30%. With a $1,000 deductible, it’d be a 40% reduction or more. So, for example, if you started with a $200 deductible and $1,200 premium, but switched to a $1,000-deductible plan, you could take your premium down to just $720 per year or less.
Shopping around and comparing insurers can help as well. Many insurance companies also offer premium discounts for having good credit, taking a driver’s education course, or having a clean driving record. You can also save by having multiple policies—like your car, home, and life insurance, for instance—with the same insurer.
4. Ask for a raise—or start job hunting.
Increasing your income is one surefire way to save up more money. To do this, research what others in your position make annually, and if it’s more than your current salary, consider asking for a raise.
You can also look for a new job. Several studies show that changing jobs can actually net you a larger increase than just asking for a raise. A study by ADP, for example, shows that workers who stay at their jobs see a 7.3% annual increase in pay, while those who change jobs enjoy a 15.4% increase.
According to another study from Pew Research, 60% of workers who changed jobs between April 2021 and March 2022 saw a wage increase. Just 47% of workers who stayed at the same job could say the same.
The bottom line is, it’s difficult to save money if you don’t have it—no matter how many expenses you try to cut. So if you’re living paycheck to paycheck, it may be worth fighting for a wage increase or looking for a higher-paying job. This will allow you to cover your expenses, while still having leftover funds to save, pay off debts, or even invest for the future.
5. Consider a side hustle.
In addition to changing jobs, you can add a second job—even just a small gig or side hustle. This could mean creating a passive income stream: driving for Uber, DoorDash, or Lyft; completing tasks on Fiverr or Taskrabbit; or signing up for a site that lets you earn money through surveys, polls, watching videos, or testing website usability, among other activities. Examples include Swagbucks, Amazon Mechanical Turk, and Branded Surveys.
If you own a home, you can also rent out all or a portion of your property on VRBO, Airbnb, or a similar platform. In 2021, the typical Airbnb host earned nearly $14,000.
Depending on what features your home has, there may be other opportunities to earn more. If you have a pool, for example, you can rent it out on Swimply, while extra storage and parking space can earn cash on sites like Neighbor, SpotHero, or Spacer. The average Spacer host brings in around $200 per month, according to the platform.
6. Take advantage of a credit card that offers rewards.
Many credit cards allow you to earn rewards or even cash back, which you could then put directly into savings. Cash-back rates can be as high as 5% to 8%, depending on the card issuer, so if you use the card often, it could boost your savings quite a bit.
“Use the card for everyday purchases, such as groceries or gas,” says Sean K. August, president of The August Wealth Management Group. “Then pay the balance in full each month to avoid interest charges.”
That last part is key, as carrying a balance on your credit card will only increase your expenses—and reduce your savings capabilities—in the long run. It could also have an impact on your credit score.
7. Switch up your transportation habits.
Transportation can be costly. Not only are there car payments and auto insurance to keep up with, but gas is pricey. According to JD Power, the average American spends around $5,000 on gas every year.
To reduce these costs—and free up more for savings—you might consider taking public transportation if possible. Doing this for work daily would likely have the most impact, but even taking public transport occasionally can help.
Carpooling—to work, for school drop-off, or even for extracurricular activities—can also be an option. The exact amount you could save depends on the type of car you drive, the distance you’re driving, and how often you carpool, but for a medium SUV, you’d save around $1,400 per year by reducing your annual mileage from 20,000 to 15,000. If you reduced the mileage to 10,000, it’d be almost $2,800 saved, according to the American Automobile Association.
8. Cancel subscriptions you don’t really need or use.
Make a list of all the subscriptions and memberships you have. These can include things like streaming services, such as Apple TV, Spotify, Netflix, and Hulu, as well as things like gym memberships and subscription boxes. Note the cost of each service and how often you’ve used each one in the last few months.
If you haven’t used something recently, consider putting the subscription on hold or canceling it entirely. This will free up funds you can put into savings—and start earning interest on.
“Also, look to cut services that double up on themselves—like streaming music and video,” deSousa says. “You probably don’t need Apple Music, YouTube Music, and Spotify and could save $10 to $20 per month.”
The takeaway
If you’re looking to increase your savings balance and ensure you have enough stowed away for a rainy day, think of ways to boost your earnings—at your current job, in a new position, or even by adding a side hustle. Reducing costs and putting those savings into an interest-earning account is another proven method.
As deSousa puts it, “Examining expenses, large and small, can be immensely helpful in eliminating financial burdens and making people feel like they are progressing toward their goals.”
