4 Savings Methods That Really Work

by Alexa Mason · 17 comments

When it comes to saving money, there’s no one size fits all.

We all have different lifestyles, incomes, and preferences. This means the ways we save money, as well as our abilities to do so, are completely different.

If you have yet to find a savings method that works for you, here are four winning ideas you can try:

1. Save a certain percentage of your income

Saving a percentage of your income is a strategy often used for retirement savings — but it doesn’t have to stop there.

This is a particularly good method for those of you who receive a variable income. Instead of committing to saving $50 per paycheck (and falling short every time your pay dips), you can instead save a certain percentage of your take-home pay.

By doing this, you won’t feel like a failure for not being able to keep up with your intended plan.

Plus, if you’re working on more than one savings goal, you can easily break down your contributions by percentages. For example, you can put 5% towards a down payment, and another 5% towards an emergency fund.

2. Save a set dollar amount

Second on the list, we have the very popular method of saving a specific dollar amount in a set time period. This method is used frequently because it works and can easily be automated.

Unlike saving a percentage of your income, with which you have to manually calculate your savings, you can save a specific number in a “set it and forget it” type of way.

Saving a set dollar amount each week/month/pay period also works particularly well when you’re running on a short deadline. For example, if you need $6,000 in exactly one year, you know you have to save $500 a month to reach your goal.

One size fits all

3. Save the (virtual) change

Throwing loose change in a jar has always been a common way to save. But now that a lot of money comes electronically, saving your change isn’t as powerful.

To save your virtual change, you’ll need to round up the purchases you make on your debit cards to the next dollar amount, then put the difference in a savings account.

One of the big banks (Bank of America) has started offering this “save the change” feature as one of its perks. Hopefully more banks get on board with this, as it’s a great way to save if you’re on a tight budget.

4. Participate in a savings challenge

Sometimes, you just need a good ol’ challenge to help you get into the swing of saving. Lucky for you, there are plenty of money-saving challenges for you to try.

Here are a few:

  • Saving all of your $1, $5, or $10 bills
  • Saving every bill that’s older than you are
  • The 52 Week Challenge: Saving $1 for each week of the year (e.g,. $1 for week one, $2 for week two, and so on. In one year, you’ll have accumulated $1,378.)

We all have different preferences when it comes to personal finances. If you haven’t found a money-saving method that works for you, experiment. Keep trying different methods until one clicks.

What’s your favorite method for saving money? Have you tried any of the ones above? 

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{ read the comments below or add one }

  • Caroline says:

    I have an account with Lloyds in the UK and they have the ‘save the change’ option on their accounts and it is a great idea. You save without even trying. I goes directly into my savings account without me having to do anything and it is surprising how it builds. I hope more banks follow suit.

  • PurpleLisa says:

    Whenever I don’t spend money that I otherwise could have, I set that “saved” money aside as a reward. Recent examples: I mailed something by two-day express instead of overnight express, saving about $20; I bought my favorite bread on a two-for-one special, saving about $4; I shopped for handyman services for a particular repair job and received 3 estimates, one of which was $1500 more than the one we chose — and the one we chose did a fantastic job on time and on budget, saving us $1500. The money we didn’t spend on those things has been set aside in a special savings account. The “saved” money definitely adds up, and is now a solid part of our overall savings strategy.

  • PurchaseWisely says:

    Since the “spare change” idea nets you so little these days, I have a variation on it. I take any cash that’s in my wallet on payday and save it for “spoiling” myself. That way, I can occasionally indulge in a pedicure or a good bottle of wine without taking it from my budget. This is in addition to my regular dollar amount savings that comes out of every paycheck. I don’t feel guilty for spending on something extra for me, since if I didn’t spend the cash by the next payday, I didn’t need it.

    Last year I was able to have about $300 worth of indulgences.

  • Another good way is: do not use debit or credit card then you avoid bank fees, you will not make impulse purchases, this will save you a lot of money.

  • Gary Kerr says:

    Of course it would be possible to think this way to acknowledge the windfall is when it it enters my budget. It doesn’t feel difficult, because I didn’t have to make any sacrifices in my budget, as it is covered completely by my “normal” income, and the budget categories I have saved up.

  • I’ve tried all of them, and I must say, setting a certain amount of income to save each month, and doing a savings challenge are the most effective ones.

    • David Ning says:

      Thanks for chiming in Mark. Joining a savings challenge is a very effective motivational tool indeed. I hope you trounce any savings challenge you are current on!

  • Amy says:

    These are great ways to simplify saving, stay on track, and achieve goals. And because I’m very focused on paying off debt right now, I like that they can easily be adapted to that goal.

  • We save a percentage in our 401(k)s and we send a set amount from our paychecks into our savings account every month. We love the convenience of being able to automate these things, it makes saving really easy.

    • David Ning says:

      Automation is the #1 best byproduct of electronic payments. Just as automatic payments can make us forget about some monthly expenses, automatic savings allow us to save even more because we will simply forget about the deposits.

  • Aldo @ MDN says:

    I was doing three out of the four you mentioned. I save a percentage of my salary on my 401(k), a set amount per pay-period towards my emergency fund and Roth-IRA, and I was enrolled in the keep the change with BofA (I switched banks and my new bank doesn’t have that program).

    I found that each saving method serves its purpose well, but my favorite is the set dollar amount.

    I love challenges but really haven’t tried money challenges yet. Maybe I should give them a shot.

    The great thing is that there are different ways to save money for different types of people. We should pick the one that works best for us.

    • David Ning says:

      Good job Aldo. Here’s a challenge you might want to try – increase your set amount every quarter, or bank a high portion of your raises.

      Save till it hurts baby! 🙂

  • Jamie V says:

    I got hired in 2011 and I’m starting to settle into some good savings habits finally! I do the percentage-of-paycheck savings for my 401K, and that fluctuates a little each month (accounting for OT). The rest is set dollar amounts, as unless I get fired, I will always have a predetermined repeating minimum income amount each month. I have my Roth IRA contributions as well as Life Insurance, and then I’ll be setting up automatic transfers to my various savings accounts (emergency savings, “fun” savings, investment, down payment, etc..). I think for the investment savings, I’m going to do the savings challenge where one saves $1 for week 1, $2 for week 2, and so on because it’s different and doesn’t require a huge dollar amount right away.

    • David Ning says:

      The 52 week challenge you mention is a great one, primarily because it seems so doable.

      And when you are done, you get to keep that $1,378, which in your case will go into investments that grow to an even higher sum!

  • These are some great tips to help get you started and on the right track for saving. Since our income fluctuates so much, we go with the second option and have a set amount we put aside each month for numerous categories. Assuming income is up for a month we then put aside more, but at the very least we have our budgeted amount automated.

    • David Ning says:

      I love the fact that you up your savings alongside income increases John. That might seem like a minor point but the little increases make a huge difference in the long run.

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