How to Save Money: 7 Hacks to Get You on Track

By Melissa Lyken // May 5, 2021

Saving money is arguably one of the biggest financial struggles for people living in the U.S. In a recent Cushion survey, saving was also a top goal for people in 2021, second only to reducing debt.

The U.S. economy is driven by consumerism—a culture that encourages people to spend money while keeping them from saving. It can be difficult to prioritize saving for retirement and putting away extra cash when most of your money is allocated to bills, emergency expenses, and leisure spending.

A little financial advice: Saving should be one of your top priorities. If you’re worried about it fitting into your plan, just know that it can (and should) be adjusted to fit your lifestyle. Looking for a sign to kickstart or fine-tune your savings journey? This is it.

Why Should You Save Money?

There are a few things that you should save for: emergencies, retirement, and personal goals.

“Sheesh,” you’re probably thinking. “With all of this saving, I won’t even have enough money for the essentials. And what about fun? Am I not allowed to have fun?!”

Saving is not meant to suck the fun out of life. In fact, it can allow you to have fun and splurge more than if you had not saved at all. It protects you in case of emergencies, gives you a financial cushion when things don’t go according to plan, sets you up for when you can’t (or don’t want to) work anymore, teaches you self-discipline, and gives you an overall sense of financial stability and freedom.

If you don’t have savings, you might find yourself reaching for a credit card in dire situations or when you want to take a spontaneous vacation. Then you’ll not only deal with the initial expense but the high interest rates that come with it.

When it comes to the essentials—like housing, utilities, and internet—these expenses should always be your top priority. In general, you shouldn’t skimp on the necessities to meet your savings goals.

However, it is crucial that you start saving, even if you start small. Save a nickel a day, save each month when your paycheck comes in. Make your savings plan work for you, not the other way around.

What Should You Save For?

Your top priorities should be emergency savings and a retirement fund, followed by short-term and long-term savings goals. How much you should save for each varies from person to person and even from time to time.

Saving depends heavily on your goals, spending habits, and lifestyle. There is no one-size-fits-all approach to constructing your savings, so you may have to dedicate some time to figuring out what works for you.

Emergency savings

Accidents happen. You’ll need to pay for a car repair, surgery, or surprise veterinary visit. You should save about three months worth of expenses in your emergency fund, depending on your lifestyle and the size of your family. This fund can be used in case of a job loss, natural disaster, medical emergency, or other unforeseen circumstance. It serves as a buffer and can be modified to fit your needs.

Retirement

It can be difficult to understand the importance of saving money now for your future self, especially if the standard retirement age is several years or even decades away. However, you should start putting money away for retirement now, as it will allow you to live comfortably once that time does roll around. There are a number of ways to save for retirement, some of which include contributing to a workplace-sponsored 401(k) plan, traditional IRA, or Roth IRA.

Personal goals

Some personal goals may take precedence over other forms of savings (growing your family, building a house, starting a business). In general, these forms of saving fulfill wants rather than needs, so they shouldn’t always rank higher than saving for emergencies and retirement. They can also be divided into short-term and long-term savings goals.

Short-term goals are activities or purchases that you plan to make in the near future, which can mean different things to different people. It could be next month’s scheduled medical procedure, a family vacation that’s six months out, or a kitchen remodel that you’d like to kick off next year. Long-term goals involve activities or purchases that are much further in the future, usually several years out, such as a month-long sabbatical or saving for college.

When you’re mapping out your personal goals and the financial planning that it will take to achieve them, determine which purchases or experiences are most important to you and plan around that. Poor planning can cause financial strain. That’s not to say that you shouldn’t treat yourself, even if it’s on a bigger ticket item. You should just be responsible and realistic about what expenses you are able to take on.

7 Hacks to Help You Save

There are endless ways to start saving money. Many can be used in tandem to achieve optimal savings, or you can choose just one to get your journey started. Remember: The best approach is the one that you can stick to.

Transfer automatically

One way to save money is to automatically transfer a percentage or dollar amount from your paycheck to your savings account each week—set it and forget it, if you will. This method contributes funds to your savings account every time you get paid.

For example, if your monthly net income is $3,000 and you want to save 10% of your paychecks, your monthly savings contribution should be $300, or $150 every two weeks.

($3,000 / 2 paychecks per month) x 10% savings goal = $150 biweekly contribution

($150 x 2 paychecks per month) x 12 months = $3,600 annual contribution 

With biweekly direct deposit, you can automatically funnel $150 per paycheck into a savings account. At the end of one year, you will have saved $3,600, and none of that money will have ever touched your checking account.

Separate your savings account

Before you put money away, create a separate account for your general bills and expenses, which may be your current checking account, as well as a separate savings account. You may even want to open a different savings account for each of your goals, for example:

  • Account 1 – Emergency Fund
  • Account 2 – Vacation Fund
  • Account 3 – Medical Fund


This is not mandatory, but it can help you keep track of where your money is being allocated and in what areas you need to save more.

Create a budget

Budgeting gives you a clear sense of direction when it comes to spending, saving, paying down debt, and allocating money to other areas of your life. Depending on your lifestyle, spending habits, and savings goals, there are different budgeting methods that you can incorporate into your life to either help you stay on track or completely revamp the way that you handle money. 

Save change

To gamify your savings journey, allocate change to different jars (literal or figurative is fine) to help you reach your goals. Every time you acquire a $5 bill, put it in your emergency fund, drop all of your silver coins into a vacation jar to cash in before your next big trip, or snag your tax refund as soon as it drops into your account to pay down debt. It’ll only be a matter of time before you build up your accounts—and the process might even be enjoyable!

Set periodic savings goals

Creating inspirational, achievable savings goals is another way to make savings a bit easier and more fun. Spending habits may vary from month to month, so it’s okay for savings goals to look the same.

One month, you might have a weekend getaway planned, where you’ll potentially spend more money than you typically would. If needed, you could reduce your long-term savings contributions and only add to your emergency fund. The next month, you might not have a lot of extracurricular activities planned so you can get serious about funneling money into your long-term savings goals.

Reduce financial waste

Downsizing your expenses—essential and nonessential alike—is another key method for saving money, and it’s something that you should regularly check in on anyway. Stop eating out so much, lower your grocery store bill, or only buy the clothes that you can’t live without.

You should also regularly audit your recurring expenses, such as cell phone and internet bills, to make sure that you haven’t been overcharged or to see where you can cut back. Re-evaluate your essential expenses and cut out the ones that no longer serve you, such as cable, a landline, gym membership, or streaming services.

Eliminate debt

No matter the debt—student loans, credit card debt, a mortgage—a monthly payment of such a large scale can be a financial drain. It can also be the thing keeping you from reaching your other savings goals. Eliminating debt is often easier said than done, but there are some strategies you can use to make the process a little easier. Negotiate your balance or interest rate, adjust your repayment plan (try the snowball method), use your tax refund to pay down your balance, or set strict boundaries on what you’re charging to credit. Not only will paying off debt work wonders for your mental and physical health, it can also give your credit score a bump.

Cushion helps you waste less money, save more, and live a financially healthier life. We monitor your bank and credit card accounts 24/7, find and alert you about pesky fees, let you know which fees are negotiable, which banks are cooperative, and can even automatically negotiate on your behalf.* To date, Cushion has secured customers more than $10 million in bank and credit card fee refunds—and we’re just getting started.

*Cushion only negotiates fees with high refund odds. We cannot guarantee any negotiations, a regular frequency of negotiations, or fee refunds—your bank makes the final call.