Unfortunately, saving money isn’t easy. You never know what unplanned expense is right around the corner. The good news? There are plenty of ways to boost your savings over time, especially if you think strategically about your spending. Read on to learn more about the obstacles you’ll face and our best tips to overcome them. 

Common Money-Saving Challenges

As much as we’d all like to have a rainy-day fund, building up your savings can be a tough financial objective. And, according to the latest government data, it may be getting even tougher. The personal savings rate — how much people save as a percentage of their disposable income — was just 3.8% in October 2023. That’s well below the decades long average of 8.6%. 

Why? For one, inflation is taking its toll on personal finances. Although there’ve been signs of it cooling in recent months, 60% of Americans say they’re living paycheck-to-paycheck. Wage growth has lagged behind inflation, making it difficult for households to make ends meet.

There are also behavioral factors that make saving more challenging than it needs to be. Although most people want to save, they simply have a hard time breaking bad habits.

Here are three of the most common money-saving mistakes (and how to avoid them):

  1. Overspending: We’re all guilty of splurging once in a while. But living beyond your means — such as eating out too often or taking trips you can’t afford — can quickly impact financial stability. The best solution? See below.

  2. No budget: If you don’t know where your money goes, you may be spending more than you realize. Setting a budget can help limit your spending to only the most necessary expenses.

  3. Lack of a goal: A savings goal can help control your spending. With a specific monthly target, you’ll have something to work toward and may be less likely to spend on extraneous items.

It may seem daunting, but with a strategic approach, you’re much more likely to be successful. Not sure how to get started? Keep reading for our favorite tips.

5 Strategies to Save More Money

Small changes add up quickly when it comes to money. So, here are five of the most effective ways to cut back on spending and save more now and in the future:

1. Challenge yourself

Saving doesn't have to feel like such a drag. Why not make it a bit more fun? In other words, try a savings challenge. This strategy breaks your larger goal into smaller, bite-sized objectives, making it more manageable. Plus, you’ll have more achievements to celebrate as you go.

Take the 52-week challenge, for instance. You’ll start by depositing a small amount into your savings account, then increasing it with each passing week. For example:

  • Week 1: $1
  • Week 2: $2
  • Week 3: $3

By week 52, your weekly goal would be to save $52. Easy, right? Although it’s a simple example, there are countless other ways to challenge yourself and make saving more attainable.

2. Map out major purchases

Cars, appliances and electronics are all big expenses — but, if you time it right, their purchase can yield big savings, too. For instance, if you plan on replacing your car, you can spend less by waiting for annual sales events and promotional periods. There are also online tools you can use to track prices over time. This allows you to swoop in at the right moment and get the best deal for your money.

3. Refinance your loans

Mortgages, car loans and student loan payments can easily put a dent in your savings. But did you know there are ways to actually lower your total monthly payments? If you have a student loan, you can apply for an income-driven repayment plan, which could reduce your monthly bill to a more manageable amount. Another option is debt consolidation, which bundles all your loans into one account. This not only makes managing multiple debts easier, but it may offer a lower interest rate — helping you pay down the debt faster. 

4. Save your tax refund

As of April, the Internal Revenue Service (IRS) reported the average tax refund in 2023 was roughly $2,700, which is a nice return if you received one. For some people, the first instinct is to spend that money on a luxury item or vacation. Others use it to pay their bills. But, if you can, setting it aside in your emergency fund can give your savings a healthy boost. 

5. Cancel unnecessary subscriptions

Monthly and annual subscriptions are a byproduct of the digital age. From streaming to meal delivery, these convenient services are nice to have — but, they add up pretty quickly. It’s a good idea to audit your subscription services. You may find a free trial you forgot to cancel or a service you don’t even use. Either way, it’s a easy way to cut back on spending in a hurry.

This content is for informational purposes only. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. Please consult with the professionals of your choice to discuss your situation.