How to Save Money the Easy Way

Get started today by slowly increasing your savings rate and splitting your raise in two.

Saving money can be easier if you have the proper strategy in place. Learn how to put money aside for an emergency fund or save for a fun getaway without dramatically impacting your lifestyle.

How much should you save?

There’s no rule that dictates how to save money and what your savings rate, the percentage of your take-home pay that you save, should be. Some personal finance experts suggest a savings rate of as much as 20 percent — the percentage can be adjusted to fit your income, age and assets.

Determine how much you should save by looking at your income, your assets and your expenses

Teenagers and 20-somethings may be okay putting aside less of their pay. They have decades to let compound interest work for them and can increase their savings rate as their earnings rise. On the other hand, a person in their 50’s with limited reserves may need to catch up on retirement savings and put aside even more than 20 percent.

Slowly increase your savings rate.

Start by putting aside a small amount of money each pay period — this can either be a dollar amount, such as $10-$30, or two to five percent of your pay. Set up an automatic transfer of the money into a savings account.

You can avoid the temptation to spend the money if you transfer it the day after your pay is put into your account. If you have direct deposit, you may be able to ask your employer to automatically put part of your pay into your savings account.

By slowly increasing your savings rate, you can watch your savings grow without feeling deprived

The final step is to mark your calendar for three months from today. When the time comes, increase your savings rate. The more you are able to adjust spending habits and save, the better, but you don’t want to feel strained by the new amount. Try slowly increasing your how much you save over time so that you can re-adjust to your new budget.

Split your raise in two.

Strategically incorporate raises and promotions into your savings plan. The next time you receive a raise or promotion, calculate how much additional money you’ll earn each pay period and divide that by two.

Allocate one-half of the raise to your general budget or spending account. Add the other half to the automatic transfer you set up to your savings account. You’ll get to enjoy having more money today, and you’ll be putting aside money for tomorrow. Try budgeting with every raise and your savings can quickly grow — you may even reach that 20-percent savings rate without realizing it.

You can take a similar approach to one-off influxes of money, including bonuses, gifts, or tax refunds. Consider setting aside half of the money to spend and put the remaining amount into your savings account.

Get started today.

Having a well-funded savings account and a good savings habits means you don’t need to worry about how you spend the rest of your money. Whether you go with the slow-and-steady approach or wait until your next raise or bonus, try implementing one of the above strategies and see how you can save money without even noticing.

Banking 101

What You Need to Know to Pick a New Checking Account

Does your checking account still match your lifestyle? Here's how to find out.

Read Article
Get 1% cashback on Debit from Discover. 1% cashback on up to $3000 in debit card purchases every month. Limitations apply. Excludes Money market accounts.Discover Bank,Member FDIC.Learn More
5 Online Banking Myths Debunked

Saving

Enhance Your Social Media Skills: 7 Ways to Use Social Media to Save Money

Procrastinating on social media much? Turn a mindless habit into a money-saving routine.

Read Article

Sunny skies are the right time to save for a rainy day.

Start an emergency fund with no minimum balance.

Start Saving
Online
Savings

Discover Bank, Member FDIC

Friends Always Want to Spend Money? Banish FOMO With These Tips

Budgeting

Family Finance

Lifestyle

What Happens to Mortgage Rates When the Fed Cuts Rates?

Your guide to understanding how a Fed rate cut could impact your mortgage as a homeowner or prospective buyer.*

Read Article

Retirement

3 Common Mistakes When Saving for Retirement

Make sure you’re saving the right way and avoid these common pitfalls.

Read Article
The Roth Individual Retirement Account

A simple way to reach your goals.

Watch your savings grow with a CD.

Lock in Your Rate
Certificate
of Deposit

Discover Bank, Member FDIC