America's savings rate is falling (it’s down to around 4% at the end of 2023, the federal government says). The decades-long average savings rate is more than twice that, CNBC reports, and it’s got experts worried.
“I’m concerned,” Tomas Philipson, a professor of public policy studies at the University of Chicago and a former acting chair of the White House Council of Economic Advisers told CNBC. “People are hit on both fronts — lower real wages and higher rates.”
Here are some strategies for increasing the amount of money you save.
Automate transfers
Set up automatic transfers from your checking account to your savings account. This will move the money without you thinking about it and, if you leave it alone, the savings account will build up over time. You can do this through your bank’s website or through apps such as Digit or Qapital.
Get groceries and some green
Plan your grocery shopping carefully around what you already have on hand. Make a list and stick to it, avoiding impulse buys. Join loyalty programs and use (not abuse) coupons to get the best deals on items you need. Some cash-back cards also offer extra percentages on grocery purchases, but remember to pay the balances off every month to avoid interest rates and fees.
Map Out Major Purchases
Try to plan for major purchases such as home appliances and cars during annual sales periods. You can also use apps and websites to track prices over time to alert you to the best time to pull the trigger.
Use the 30-Day rule
Avoid overspending by giving yourself a 30-day cooling-off period between the time you see the thing you want and when you make the purchase. Use that time to look for coupons and better offers to save yourself money on the purchase.
See what you can bundle
Check into bundling some of your bills, such as cable and Internet and wireless plans. Downsize any services you don’t use, and keep track of your subscription services so that you aren’t paying for something you rarely or never use.
Pay off high-interest debt
Target high-interest debt first, paying it off more quickly through extra payments. Then, start rolling that money into a savings account to build up a nest egg.
As you grow your money, consider putting some money aside in a high-yield savings account to help it grow even faster.
