Skip to Main Content

5 ways to sweeten your savings a little at a time

Woman dropping sugar cube into tea
Serge/Getty Images
Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .

The average American saves about 3 to 4 percent of their income, but bumping that up just a little could go a long way in helping to reach long-term goals.

A 2015 “America Saves” poll by Fidelity Investments found that many people underestimate the value of saving an extra $50 per month over a 25-year period. Fidelity says that money could accumulate to more than $40,000 because of compound interest and potential market growth.

Here are five strategies to build your savings in little ways.

Bonus tip: Open a savings account and start earning interest.

1. Start saving now

Many people think they will save more once they make more money. But the best way to save is to start early and get in the habit of saving.

“The key thing, particularly for young people, is that making even a little progress toward saving money today can make a significant difference 35 years from now,” says John Sweeney, executive vice president of retirement and investing strategies at Fidelity Investments.

If you don’t have extra cash left over once all the bills are paid, track your spending to find areas where you can cut spending. Then, put that money to work in a savings account.

2. Start with a small amount

Setting aside a small, incremental amount of your earnings will help you slowly build savings. If you’re among the Americans saving 3 to 4 percent of their income, bump it up to 4 or 5 percent. Once you have that down, increase it another percent, and so on.

Another way to do that is to trick yourself by budgeting less than what you really earn.

“If you’ve recently started your first job, it’s a great idea to budget as if you’re earning just 85 cents on the dollar and put away the rest,” Sweeney says.

Every time you spend a little less, make sure you put that extra money into your savings account.

3. Go automatic with paycheck deduction

One of the smartest things you can do is have part of your paycheck automatically deducted into a savings account or set up a regular transfer of funds.

Setting up a direct deposit can help your money get to the right account without you having the opportunity to spend it.

4. Contribute to a retirement account

If your employer offers a 401(k) or a similar plan and matches contributions, be sure to contribute up to the full employee match. Otherwise, you’re leaving money on the table, says Sacha Millstone, a wealth manager at Raymond James & Associates.

For most young people, a Roth IRA or Roth 401(k) makes the most sense for retirement savings because the money will never be taxed again after being placed in the account.

“Even if you don’t have a company-sponsored retirement account, you can open your own IRA,” Millstone says.

“One key element to the equation in retirement savings is how you allocate your investments,” Sweeney says. “You need to assume some risk and exposure to stocks in order to grow your savings. For young people, 90 percent of their money should be in stocks, but when you’re closer to 65, you should allocate more of your money to fixed-income investments.”

5. Check out bank account bonuses

Banks across the country often offer generous bonuses just for signing up for an account and meeting certain requirements.

These bonuses could provide an alternative to those meager rates offered on many savings accounts and CDs.

Check out Bankrate’s roundup of the top bank account bonuses.