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7 Ways to Finally Save More in 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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The new year is a perfect time to make some changes in your life, whether that’s starting a new workout program or getting a new job. Whatever lifestyle changes you might want to make, don’t forget to include your finances in your new year’s overhaul. Saving more money in 2019 and beyond can help to improve your quality of life along with your other new year’s resolutions.

Here are seven ways to save more in 2019:

#1: Switch to an online savings account

The first (and easiest) thing you can do to save smarter this year is to open an online savings account. Online savings accounts consistently offer high interest rates, especially when compared to traditional brick-and-mortar banks and credit unions. It’s an easy way to set aside money and let it grow much more efficiently than with your local bank.

Let’s say you have $1,000 to stash away in savings. The average savings account APY rate (as of press time) at a brick-and-mortar bank was 0.26%. Without any additional deposits, that would yield a total of $2.60 in savings after a whole year. If you placed that same $1,000 in an online savings account, with the average APY rate of 1.52%, you’d end up with an extra $15.20 in a year.

There are a few drawbacks to online-only savings accounts to be aware of, but they’re pretty easy to get around. Online banks don’t have physical branches where you can seek assistance in person, but they still offer comprehensive customer service.  Many online banks lack access to ATMs, although there are banks that will refund your ATM fees for using a third party ATM or give you access to surcharge-free ATM networks like Allpoint.

If you’re not sure where to start, check out our picks for the Best Online Savings Accounts.

#2: Automate your savings

Whether you switch to an online savings account or not, it’s also best to automate your savings. That way, you’re constantly saving money, even when you’re not thinking about it. This can especially come in handy when you get too busy to pay attention to your savings or in the event you go a little spending crazy. It also helps to budget in these savings as though they were just another necessary expense. That way, it becomes more natural and automatic in your mind as well.

To automate your savings, you simply need to set up automatic and recurring transfers from another account (like your checking account) or your paycheck to your savings account. While monthly payments are typical, you may be able to set the payments to be as frequent (or infrequent) as you’d like. You don’t need to set aside a huge amount each time; perhaps start with $25. Then you can increase the payments with each pay raise or decrease them if necessary.

#3: Explore CDs

When you have enough savings stashed away in a traditional savings account, consider certificates of deposit (CDs) as the next level to saving. Available in a variety of terms, typically from three months to five years, a CD doesn’t come with the flexibility of a standard savings account but can yield higher returns. Once you open a CD and make your initial deposit, you can’t make any withdrawals or additional deposits until the CD’s term is up, known as maturity. This makes CDs a better option for long-term savings goals, like buying a house. You can park your extra savings in the account now, locking in a high rate, and come back to your savings in a few months or years.

Check out our round up of the best CD rates right now >

#4: Open an interest-bearing checking account

Your money grows while sitting in a savings account, so why shouldn’t it do the same in a checking account? Switching your money over to an interest-earning checking account is a smart and easy way to ensure you’re always growing your savings. You shouldn’t expect the high-reaching rates of savings accounts, but you can still earn some extra money over the months. You have plenty of options from both brick-and-mortar banks and online banks. You’ll still find that online banks’ checking accounts offer better rates and much lower fees, though.

#5: Create a $1 or $5 rule

In addition to opening the right accounts, consider adding this more old-school savings approach to your routine. It’s as simple as setting aside the dollar bills, or five dollar bills, that accumulate in your wallet. For starters, this tactic can prevent you from overspending your cash. But it also helps to slowly and steadily grow your savings over time. You can deposit this saved cash into a high-yield savings account at the end of each week, month or year. You could also use it to save it up towards a specific savings goal.

#6: Download handy savings apps

It’s true that there’s an app for just about everything nowadays and saving money is no different. Shopping apps like Ibotta and Ebates are a good place to start. They earn cash back on purchases you make, from your regular groceries to those new headphones you’ve been eyeing. That way, you can earn a little extra cash on money you were going to spend anyway.

You can also start saving little by little with one of the best money saving apps for the long term, Acorns. Acorns links to your bank account and rounds up your purchases to the nearest dollar, taking the spare change and investing it in a personalized portfolio of stocks and bonds. Not only does this set aside some savings automatically, but it allows your savings to grow. It’s also a good way to try your hand at investing if you’re not already familiar.

#7: Add 1% to your 401(k) savings

Saving for retirement should always be a part of your savings goals, and if you have a 401(k), it’s a great way to maintain your savings. The standard rule dictates that you save 10% of your pretax income towards retirement. However, that can be overwhelming and unattainable for many. In that case, it’s okay to start small even if that means saving 1% this year. Then you can boost your contributions by another 1% next year and so on. That way, you continue to save for your retirement in a way that’s more manageable for you and your finances.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lauren Perez
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Lauren Perez is a writer at MagnifyMoney. You can email Lauren here

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How to Save on Back-to-School Shopping

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Parents often revel in the calm and quiet that comes when kids head back to school, but they aren’t likely to enjoy the excess spending that also accompanies the back-to-school season. According to the National Retail Federation, parents will set a record in 2019, spending an average of $696.70 per household on children in elementary school through high school.

 

“It was interesting to see the across-the-board increases in spending levels,” said Mark Mathews, vice president for research development and industry analysis with the NRF. “Elevated levels of consumer sentiment, healthy household balance sheets, low inflation and recent wage gains all seem to be contributing to a confident consumer who is willing to spend money on back-to-school supplies.”

If you’re planning a trip to the store before classes start, there are a few ways to curb the spending and save some bucks.

Plan ahead

No parent should set foot out the door for back-to-school shopping without first taking stock of what they already have. Plenty of old supplies from previous years might still be usable, especially arts and crafts items like crayons, pencils and pens, as well as more expensive things like backpacks, lunch boxes and calculators.

Crossing a few items off your list is a good first step when it comes to saving, but learning how to budget is also important. It’s tempting to run down the back-to-school aisle and grab every colorful notebook and snazzy pencil case in sight, but it doesn’t make a lot of financial sense. Create a realistic budget based on the items you actually need, and try your best to stick to it. If possible, do most of your shopping online, since it’s easier to keep a running tally of how much you’re spending as you shop.

Be smart about sales

Although you’re bound to run into many back-to-school sales this time of year, you don’t need to buy 12 notebooks just because they’re cheaper right now. In fact, you shouldn’t assume the sales price is the best price at all, said consumer savings expert Andrea Woroch. Instead, always comparison shop.

“Run a quick Google search online or on your phone to see if another store is selling the same or a similar item for less,” she said. “Most big box stores will price match, so you won’t even have to drive to another store to get the better deal.” For example, Target,Staples and Walmart all have price matching policies.

Clip coupons and shop discount stores

Coupons have definitely made a digital comeback, with countless apps and websites dedicated to listing all your options in one place. “Spending a few minutes looking for coupons can help you get a better discount,” Woroch said. “Use apps like CouponSherpa, for instance. Or, use the Honey browser tool, which automatically searches and applies relevant coupons to your online order.”

Many stores also offer discounts to valued customers who sign up for their rewards program, like Walgreens and CVS, while craft stores like Michaels regularly offer discounts. Don’t knock purchasing basics like paper and writing supplies from the Dollar Tree, either — you might be surprised by what you find, and those types of items are often the same quality wherever you buy them.

Tax advantage of tax-free holidays

On select dates throughout the year, different states offer state sales tax holidays, or days where you can purchase items without having to pay sales tax on them. You can find a full list of the 2019 state sales tax holidays here, but some upcoming ones include:

  • August 18-24: Connecticut, clothing and footwear
  • August 17-18: Massachusetts, specific items costing less than $2,500 per item

Split bulk purchases

You can usually save money by buying certain items — like construction paper, pens, pencils and folders — in bulk, but you can save even more by splitting those bulk items with other families. Not only is this a great way to share savings, Woroch said, but you can earn rewards faster by charging everything on your card and then having the families pay you back.

Redeem your rewards

If you have a cash back credit card, now’s the time to use it. “Most credit cards give you the best redemption value when you opt for statement credit or have the cash rewards deposited into your bank,” Woroch said. “You can set this money aside for back-to-school shopping.”

Alternatively, Woroch suggested checking to see if your particular card allows you to redeem points for gift cards to retailers where you plan to shop.

Use discounted gift cards

Besides redeeming credit card points for retailer gift cards, you can also scour the web for cheap gift cards online. Planning a trip to Target? Scan websites like Raise,Cardpool and CardCash first. These sites buy and sell unused gift cards at a discount, meaning you can save on purchases you were planning to make anyway.

Consider having your kids contribute

Depending on your child’s age, back-to-school shopping might be the perfect time to start having them contribute to their own goods, especially if they earn an allowance or have a job. Talking to your kids about money at a young age — whether about budgeting, saving or spending — will help them develop solid money habits that will pay off in the future.

Parents already seem to be catching on to this idea. “It was surprising to see how much of their own money kids are contributing towards the back-to-school bills,” Mathews said. “Teens and pre-teens will be spending $63 of their own money, which works out to $1.5 billion overall. This is significantly higher than the levels we saw a decade ago.”

Although the news about increased spending on back-to-school supplies may be alarming, these days there are more ways than ever to save. A little ingenuity, resourcefulness and research can go a long way.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Cheryl Lock
Cheryl Lock |

Cheryl Lock is a writer at MagnifyMoney. You can email Cheryl at [email protected]

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Survey: Most Americans Have Raided Their Retirement Savings

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Successfully saving for retirement requires dedication and self-restraint, but more than half the country admits to robbing their future selves in order to satisfy today’s spending needs, according to a new survey by MagnifyMoney. While the economic pressures bearing down on workers today make their actions understandable, the hard truth is that many Americans are turning an already-difficult task that much harder by tapping into their retirement savings early.

Key Findings

  • Approximately 52% of respondents admit to tapping their retirement savings account early for a purpose other than retiring: 23% have done so to pay off debt, 17% for a down payment on a home, 11% for college tuition, 9% for medical expenses, and 3% for some other reason.
  • About 29% say there are some scenarios where it is a good idea to withdraw money early from a retirement savings account.
  • Around 60% of respondents do not know exactly how much they have saved for retirement. Just 40% know the exact amount, while 45% have a rough idea, and 15% have no clue.
  • Almost 25% are unhappy with their retirement savings. 47% are happy with the amount saved, and about 28% are neither happy nor unhappy.
  • Finally, 27% have never thought about how much money they’ll need in retirement.

Why are Americans tapping their retirement savings early?

The two main reasons respondents cited for withdrawing money from their retirement savings are as American as apple pie: home ownership and personal debt. According to the survey, 23% of those making an early withdrawal did so to help pay down non-medical debt, while 17% needed the money for a down payment on a home.

Although the housing market appears to be cooling off compared to just a few years ago, a down payment on a home still requires a significant chunk of change — experts recommend a down payment equaling 20% of the total mortgage to optimize your mortgage payments.

Personal debt, from credit cards to student loans, remains a fixture of everyday economic reality for millions of Americans. In other words, the stressors that cause workers to raid their retirement funds don’t look like they will decrease appreciably in the foreseeable future.

Which Americans are withdrawing money the most?

Breaking down the demographics, older savers are less likely to withdraw money from their retirement fund than younger savers. 54% of millennial savers say they’ve taken an early withdrawal from a retirement savings account, compared with 50% of Gen Xers and 43% of baby boomers. This stands to reason considering that many millennials have now entered the stage of life where they are getting mortgages, starting families and taking on bigger financial obligations while also being decades away from the traditional retirement age. Millennials are also more likely to say that raiding your retirement fund is justified under certain circumstances, as seen in the chart below:

Just one of many bad retirement savings habits

Tapping into retirement funds — whether an employer-sponsored 401(k) or a traditional IRA — before the appropriate age almost always comes with a financial penalty in the form of additional taxes and fees. What is more, you’re diminishing the principle that fuels the compound interest you need to meet your retirement savings goals.

Unfortunately the survey reveals early withdrawals are just one of the many bad habits Americans engage in when it comes to retirement savings. This list of less-than-ideal practices includes:

  • 35% of Americans are not currently saving for retirement. Of those who are, 37% started saving at age 30 or above, and 12% started saving when they were older than 40.
  • 60% of Americans do not know exactly how much they have saved for retirement. Just 40% know the exact amount, while 45% have a rough idea and 15% have no clue.
  • Nearly 1 in 5 Americans don’t contribute enough to their employer-sponsored retirement account to get the maximum company match. Maximizing a company match is one of  your best ways to maximize your retirement savings. Among those with an employer-sponsored retirement savings plan, just 17% of respondents contribute 10% or more of their take-home pay. Almost 5% contribute nothing at all, and nearly 6% are unclear about how much they contribute.

  • Approximately 42% of respondents have made the mistake of withdrawing their entire balance from an employer-sponsored retirement plan when changing jobs without rolling it over – and nearly 15% have done so more than once. A little more than 47% of millennials admit to this faux pas.

The most damning finding of all is that 27% of those surveyed have never thought about how much they’ll need in retirement. And while “ignorance is bliss” may hold true when it comes to some things in life, this expression should not apply to your retirement plans.

Methodology

MagnifyMoney by LendingTree commissioned Qualtrics to conduct an online survey of 1,029 Americans, with the sample base proportioned to represent the general population. The survey was fielded June 24-27, 2019.

Generations are defined as:

  • Millennials are ages 22-37
  • Generation Xers are ages 38-53
  • Baby boomers are ages 54-72

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

James Ellis
James Ellis |

James Ellis is a writer at MagnifyMoney. You can email James here