Save this Winter to Avoid Canceling Plans Next Summer

When the sun finally comes out, so does the temptation to spend. Weekend vacations, increased childcare and happy hours can all chip away at your bank balance and raise your expenses along with the temperature. That’s why it’s important to start savings this winter, to ensure that when next summer arrives—you’re able to spend without worry.

Summertime doesn’t have to capsize your savings account. Starting your savings plan at the end of each summer, and staying on it through the winter, will make the expenses of next summer feel like a breeze. Supplement your strategies with an online savings account that will make your vacation fund go a little further.

1.     Enroll In Automatic Savings

If you get paid for work through direct deposit, you can set up your account to transfer a certain percentage of your paycheck directly into your savings. People who otherwise overspend can start off the month by ensuring a regular amount is set aside. With automatic transfers, it’s also easy to map out your savings goals and make regular, incremental progress toward achieving them.

If you want to put away money for a three-month emergency fund cushion, work backwards to find a comfortable percentage of your monthly income. If you automatically transfer 5% of your paycheck to your savings account, by the end of the year you’ll have set aside 60% of your monthly income — a comfortable buffer than can insulate you in the event of emergency medical expenses.

With convenient mobile access to your financial information and remote check deposit, you can easily manage your finances without visiting a physical bank.

2.     Round Up Your Pennies

Keep the change and small bills when you break a $20 in your jar at home, then move the cash into your savings account. Round off even amounts from your checking account — keeping the balance at an even single or tens digit — is a convenient trick to put away a little bit every year. 

This is an analogue savings strategy that several credit cards use — when you make a purchase, they round off the total to the nearest dollar and make a deposit into your savings account. The savings might start off small, but over time these regular visual reminders can help you build robust saving habits that will eventually become second nature.

3.     Organize Your Finances

If you’re paying high fees and getting low interest on your savings account, it might be time to break up with your bank. While the average annual percentage yield (APY) is .08% across savings accounts — with some APYs dropping as low as .01% — your savings might be gathering more dust than interest. Some banks also charge additional monthly maintenance fees to manage your money or if your balance falls below a certain cutoff.

High yield savings accounts with 2% or higher APYs help your money to accumulate faster. Banks often use compound interest, which means that after a certain period, the interest is rolled into your total and you can earn interest on that as well. Banks can compound interest yearly, monthly or daily, which might affect how much you can put away.

Fiona is a free online search tool that can help you find the savings accounts that earn you the highest interest. You can search and filter for real-time offers in your area that meet your interest rate and minimum balance needs.

Banks are legally allowed to change their interest rates whenever they want. Some offer high introductory APYs for new customers and then after a brief honeymoon will drop you down to their lower, ordinary rates. If you have the time and patience to shop your money around, you can take advantage of introductory APYs and then move on when the offer expires.

Avoid banks with extraneous charges that erode your savings. Overdraft fees, ATM fees or high credit card interest rates can come back to cost you in the long run.

4.  Cut Non-priority Expenses (To Save Up For The Good Stuff)

Look for small, repeat purchases you could cut back on or eliminate without too much effort. Do you buy takeout every day at lunch? Pack your own leftovers or downgrade your coffee to a cheaper option. Maybe you have some legacy subscriptions still pulling from your bank account, even though you haven’t used that service in ages.

To multiply the benefits, pool your savings efforts with other like-minded friends. Go in together on subscription services like Hulu or Spotify, or carpool to work with any coworkers that live nearby. 

As we attempt to pull money out of thin air against the daily demand of expenses, trying to save can sometimes feel like a magic trick. But saving a little bit at a time will add up without creating pressure on your bank account.