Savings for Beginners: 7 Tips for Long-Term Growth

August 9, 2024

Among the first things that need to be done on the road to financial security is saving money. Experts agree that building savings is key to financial independence. Yet Americans only saved 3.6% of their disposable personal income as of February 2024, the lowest level in more than a year, and compared to 5.3% from a decade ago. Whether you are saving for an emergency fund, a big purchase (house or car) or future investments, Ridgewood Savings Bank is here to support you with these seven tips to help you with your long-term savings goals.

1. Set Clear Goals

Define what you are saving for: an emergency fund, a new car, or a down payment on a house. Having a clear goal helps keep you motivated and on track. The Ridgewood Financial Academy provides free online financial information in a quick and easy format to help bring these goals within reach.

2. Create a Budget

A budget gives you a big picture view of your finances and helps you set priorities for spending. When creating a budget, it’s important to distinguish between “wants” and “needs.” Ridgewood Savings Bank’s interactive budget module includes strategies, tips and tools to help you live within your means – that is, not spending more than you make and avoiding using more credit that you can pay off monthly.

3. Open a Separate Savings Account

Keep your savings removed from your checking account so you're not tempted to raid your savings for impulse purchases. Look for accounts with the best interest rates possible to get more out of your savings dollars. Ridgewood Savings Bank provides a variety of savings account options tailored to help meet diverse needs. One such option is the Smart Move Savings account, which has no monthly fees or minimum balance, allows 24/7 access to your account and, has a competitive annual percentage yield (APY).

4. Make Your Savings Automatic

Allocate dollars from your checking account to be deposited into your savings account without having to make the transfer yourself. This ensures that a part of your income is saved before you can spend it, making saving a breeze. Start small but automate monthly deposits into a high-yield savings account like those offered by Ridgewood Savings Bank. Another way to integrate savings is with the bank’s Multiply the Change program, which automatically rounds up debit card purchases to the nearest dollar and transfers the difference to a savings account at the end of each business day. Vacation and Club Savings Accounts are a great way to save for vacations, special events, or the holidays. On a set schedule (weekly, biweekly, monthly) an amount you specify is automatically transferred from your Ridgewood Checking Account and deposited into your Vacation and Holiday Club Savings Account.

5. Cut Unnecessary Expenditures

Analyze your spending habits and identify areas where you might cut costs. Small changes, like making coffee at home or canceling unused subscriptions, can add up over time and significantly boost your savings. Did you know that by giving up your $5-a-day coffee, you could save more than $1,800 in a year? Visit the Ridgewood Financial Academy and look at 50-30-20 rule calculator to determine a recommended amount of how much you should be spending each month.

6. Save for Retirement

If your company offers a 401(k) savings plan, try to contribute enough to get the full match. Even if you can't contribute enough to get the full match, it's still beneficial to save what you can. Every little bit adds up over time. Plus, it's money for your future and one more great way to build your retirement fund. Ridgewood Savings Bank also offers Individual Retirement Accounts (IRAs) to help you save for the future.

7. Track Your Progress

Regularly check your savings goals and see how you're doing. Adjust your budget and savings strategy, if necessary, to stay on course and motivated. And with the help of our online banking site, monitoring your savings and tracking your progress is easy. Ridgewood offers a complete suite of digital banking tools to help you bank anytime, anywhere.

Saving for the future should not be intimidating. By following these tips, it will help you to achieve your goals and experience growth in the long run. Ridgewood Savings Bank is here to support you each step of the way. Open a savings account with us today and start your financial stabilization and growth journey.

 

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