One way of saving money involves living in a damp, windowless apartment, feeding pigeons for entertainment instead of going out, and forgetting about ever having kids. Let’s call that Plan B.
A more sustainable (and definitely more pleasant) option is to continue doing the things you normally enjoy, but tweak them slightly so you end up spending less. You can still eat out when you feel like it, but look for special offers. Take vacations when you need to, just figure out ways to get the same experience for less. And when it comes to unavoidable necessities like banking, find ways to save money with your checking account without having to change your spending habits.
It could be that you’ve never realized that your banking costs and habits are, at least partly, under your control. Perhaps you’ve been under the impression that ordinary people can’t get discounts from these seemingly all-powerful institutions. You have more power than you think, though: at least one of the following 7 strategies is certain to save you some money every month. The best way to save money in a bank is just to understand how they work and what they can offer you besides the absolute basics.
Table of Contents
- 1 Choose the Right Kind of Checking Account to Begin With
- 2 How to Save Money in Bank Fees
- 3 How to Save Money in Bank Account Rewards
- 4 Set Up Direct Deposit If You’re Still Getting Paid by Check
- 5 Automate Your Savings
- 6 Commit to a Money Saving Challenge
- 7 Create a Savings Goal that Inspires You
- 8 The Importance of Making Small, Positive Changes
Choose the Right Kind of Checking Account to Begin With
Few people know how to save money without a bank account of some sort, so you probably have a checking account already. Is it the best one for someone in your particular situation, though?
Aside from the general-purpose checking account most people feel comfortable with, you can also take a look at high-interest and cashback types. Most checking accounts pay a negligible interest rate. Others, however, do encourage you to keep larger sums in them with yields that can rival accounts specifically meant to store long-term savings. Connexus Credit Union Xtraordinary Checking, for instance, offers yields of up to 1.75% APY and has no minimum balance requirement. Others feature competitive rewards programs – we’ll expand on this subject in just a little while.
In addition, you can choose to open an account with an online-only bank instead of a more traditional institution. If customer service or the ability to deposit cash is important to you, you’ll need a branch near where you live. If not, you’ll appreciate the lower fees online options typically charge. Whichever one you go with, make sure that their mobile app is up to scratch. You will, for instance, want to be able to deposit a paper check just by uploading a photo of it.
Plenty of banks also offer checking accounts geared specifically towards college students, seniors, self-employed people, and various other groups with particular needs. It never hurts to do a quick check on Google to see if any of these will work for you.
How to Save Money in Bank Fees
Math isn’t what Walter White concocts in a trailer, it’s a basic life skill that anyone can learn – at least in as much as you need it to manage your finances. The best way to save money in bank accounts isn’t just depositing as much cash as possible but also understanding how much you’re paying for the privilege.
You should ideally construct a little spreadsheet like the following, with values representing your own financial habits filled in the second column and bank charges (which they’re required to publish on their websites) in the others:
- ATM Fees: Banks generally don’t charge you for using cash machines within their network. If they’re poorly represented in your area or you travel abroad, however, this may become a burden you don’t need.
- Monthly Service Fee: Another reason to choose an online-only bank (which generally doesn’t have to charge maintenance fees) is that some accounts come with a high administration cost. Other features may make this worth paying, but it can still take a hefty chunk out of smaller balances unless you can get the bank to waive them.
- Overdraft Fees: Most banks fine you for having too little money in your account when a payment comes due. Some budgeting apps can help you prevent this from happening, but these fees are something to watch out for if you’re living hand to mouth. Some banks will automatically transfer money from a linked savings account without imposing a fee.
How to Save Money in Bank Account Rewards
It could be that you noticed the above table is lacking several important numbers. For one thing, the interest rate each type of checking account pays isn’t represented: 1.5% APY on $5,000, for instance, yields $6.25 per month to offset those fees.
More importantly, though, some banks will give you back a small portion of what you spend through your checking account, much like many credit card providers do. Comparing different rewards programs is more difficult than with fees, though, as each has its own set of rules.
The Discover Cashback Debit Account, for instance, earns no interest and carries no monthly fee, but they will return 1% of all debit card transactions of up to $3,000 each month, netting you up to $360 per year. If you spend more than that amount on a regular basis, it may even make sense to open a second checking account so you don’t exceed that ceiling.
Aspiration Spend & Save works quite differently, including by paying much higher cashback rates when you shop at ecologically sustainable businesses and letting you pay whatever monthly fee you think is fair. With Bank of America BankAmeriDeals, an umbrella program covering several different BoA products, you can get up to 20% cashback, but only when you buy from specific vendors on a rotating list. Clearly, people who are willing to track these deals on a regular basis are at an advantage when it comes to how to save money in savings accounts, checking accounts, and credit cards. It’s a good idea to see how well different products match up with your spending habits – and then remember to shop accordingly.
Set Up Direct Deposit If You’re Still Getting Paid by Check
Assuming that you have a checking account with them, very few banks will levy a fee for accepting paper checks. Having your employer deposit your salary by direct deposit, as more than 90% of people already do, is however much faster.
Banks generally need to verify that the person or company who wrote the check has sufficient funds in their account before releasing that money to you; if it takes time for your paycheck to travel through the mail and actually get deposited at a branch or ATM, this delay is extended further. In other words, choosing direct deposit doesn’t save you money directly, but it does make that money available sooner. This may save you from having to pay an overdraft penalty – as an added bonus, many checking accounts drop their monthly fee once direct deposit is enabled.
Automate Your Savings
As long as you have both at the same bank, it’s incredibly easy to link a savings and checking account. At least in theory, these have very different purposes: the former is to store cash in the medium term for your emergency fund or save it for something like the down payment on a house, while your checking account is for everyday transactions. The question becomes: how to save money in a savings account when it’s so easy to spend it while it’s enticingly sitting there in checking?
Relying on willpower alone is generally a bad strategy; short of being obsessed with saving for a rainy day, most people fail to put away some money every month. Don’t let this be you: most banks and several third-party apps allow you to send money straight from your paycheck to a savings account. This may be a fixed amount every month, a figure based on your predicted earnings and expenses, or a few pennies every time you perform some action like using a credit card. Since this essentially takes the day-to-day decisions out of your hands, these automatic deductions are probably the single best way to save money in the bank.
Commit to a Money Saving Challenge
Did you know that there’s an entire educational theory about helping kids learn through games? Adults may enjoy different forms of entertainment, but the same principle applies: we all love to win any kind of contest, even when we’re the only player.
Much of the advice you’ll find on how to save money without a bank account also applies to checking accounts. Many people place their pocket change in a jar at the end of the day, for example. A money-saving app that rounds each debit card purchase up to the nearest dollar and deposits the difference into your savings account is just a technological way of doing the same thing.
Another game you can play with yourself (and organize through an app on your phone) is called the 26-week savings challenge. The basic idea is that you save a trivial amount, one you won’t even miss, in the first week. Every seven days, that amount increases slightly, until you’re regularly putting away substantial cash without it feeling like a chore.
If you have a problem with overspending in some particular area, say ordering takeout instead of cooking, you can also try this exercise: every time you manage to resist that impulse, place the money you save straight into your savings account. This not only builds up your nest egg surprisingly quickly, it can also help you get rid of your bad habits.
Create a Savings Goal that Inspires You
It’s easy enough to say that you want to have some money in the bank someday – you know, in a general, sort-of kind of way. A lot of people feel the same about getting into shape.
Just maybe, it’s time to get off the sofa and start doing some financial cardio. Here’s the thing, though: exactly as with exercise, it’s very difficult to get motivated over some vague, far-off objective. Instead, choose a goal that’s realistic yet still challenging – a size-32 waist, perhaps, or being able to buy your next car in cash. This gives you a figure to aspire to; when coupled with a timeframe, you’ll now know how much money you need to save every month in order to reach it.
The other advantage of having a clear, measurable goal is that you can track your progress over time. Before long, this by itself becomes an incentive; you’ll find yourself searching for new inspirations on how to save money in your bank account.
The Importance of Making Small, Positive Changes
Have you ever bought a new tool – a vacuum cleaner, for instance – that comes with half a dozen attachments you don’t know the purpose of? This is how many people feel about their checking accounts: they understand the basics, but they don’t quite get the finer points of how to save money in bank accounts.
Once you start discovering how to save money in a bank account, you’ll quickly see that none of this is rocket science. All you really need to do is choose to start – after that, most of the rest happens without you having to do much of anything.