6 Ways to Build Your Savings When You're Low on Funds
  • Having savings is essential for everyday life as well as emergencies but it’s hard to save.
  • Most articles written for saving with low funds, start with the presumption that those who are low on funds are just overspending on unneeded things- this article intends to break this trend.
  • Savings may start small but they’re always worth it, with money management tools and smart spending, saving gets even easier.

Many articles of this kind start by assuming that the average person is only "broke" because of their avocado toast "addiction" or that those who are low-income are splurging on Starbucks daily, but debt and savings are much more complicated than that. Using experience working at a retail banking establishment, here are six small tips to save wallets and build savings.

Despite the patronizing tone of articles like those mentioned previously, something in them rings true. No, this article doesn’t assume people are buying steak or $5 coffees every day, but it does acknowledge that a savings reservoir, even a small one is vital. A lot of extra spending is under the control of the spender, so the good news is, there are ways to curb spending and save more.

6. Make That Account Work for You

There are a few benefits to having a checking and savings account, rather than hoarding money under the bed. The first is that accounts generate statements and the second is that accounts often come with special offers, like discounts on concert tickets for belonging to a bank.

Many banks offer an online banking interface for deposit accounts and credit cards that breaks spending down into categories to make it easier for users to see where their money goes. Even when these fancy tools aren’t available, statements should be carefully examined to find trends in overspending as well as any mistakes. Many people have caught fraudulent purchases and duplicate payments just by looking through their statements.

Staying abreast of the special offers banks and other financial institutions offer is also a good idea. Sometimes there is a sign on bonus for new account holders, a buddy bonus for referring a friend to sign up or even cash back or interest rate bonus for making purchases on a credit or debit card.

5. Avoid Account Fees

This seems like a no-brainer, but anyone who’s worked at a bank knows this old tune. Avoiding fees are incredibly important when it comes to not having the money that is saved, depleted before it can stack up. The most important thing is understanding how an account works. Many deposit accounts (checking and savings accounts, typically) charge a fee unless specific requirements are met (student enrollment, when an account holder is 18 or younger, with a certain amount of direct deposits a month, etc.).

That being said, changes in status, like graduation or turning 18, or changes in income can mean that fees are no longer waived. Staying vigilant by looking through statements, reading through correspondence the bank sends, among other things is essential. Most banks have an online presence where account requirements can be reviewed, which helps account holders figure out why they were charged, how they can avoid being charged or if another account is best for them.

Another way to stay vigilant is to keep track of credit card spending. A credit card is a great resource but only if used responsibly. Setting reminders, like email or text reminders or an automatic withdrawal can ensure that payments aren’t missed. For other loan accounts, never be afraid to call the bank long before your anticipate missing a payment and ask for a payment extension rather than paying late and wading through fees.

4. Put a little Away

It’s important to remember that savings can start as small or as large as possible. It’s better to toss $20 in a savings account every week than to reason that it isn’t going to matter anyway and spend it. For some people, restricting the view of certain statements in online banking or unlinking savings accounts from their debit card, ensure that they are less likely to transfer funds from savings.

Many banks allow customers to create some automatic savings scheme. This can be in the form of having money transferred to a savings account every time a purchase is made or an automatic transfer to savings with every paycheck or on certain days of the month. However small, savings are savings and all savings have to start somewhere. Over time as people save they are typically able to add more money to their savings but even transferring $20 a week is $1,040 a year saved.

3. Spend Smarter

Many articles on saving talk a lot about spending and there’s a reason why. Many things aren’t necessary for life, but it’s impossible to expect that people only buy the bare minimum required to sustain life without spending extra on items they prefer that aren’t necessaries. Spending smarter can have a significant impact on the funds that are left over to put into savings.

See also: How to save emergency fund

In addition to sites like Groupon or coupon apps, smarter spending is more straightforward and more fundamental than you think. Many supermarkets, like Aldi, carry the same fresh groceries and even "specialty items" (vegan food, gluten-free foods, organic foods, imported foods) at a much better price than traditional markets. Many discount clothing stores or thrift shops carry the designer bags, home goods, and beautiful shoes, just like the big name stores and the old trick of buying last season’s clothes or buying items out of season (like purchase coats in summer or right at the end of winter) never fails.

2. Read the Fine Print

Like with deposit accounts or loans, everything has fine print. Some of the most predatory money leaches are very transparent about how much money will be wasted (usually in interest) by using their services; people just don’t read them! For instance, buy-to-rent schemes often bank of customers being unable to afford a product right away, so they are willing to pay much more money over a more extended period to obtain the item sooner. Since the payment plans use much lower amounts, it looks much more manageable, but if the payments are added up, customers can see quickly just how much more they are going to spend.

When late fees and interest payments are added to that cost, customers are better off saving up until they can afford that new bed or getting their new dresser from Craigslist or a furniture outlet.

Likewise, payday loan companies can seem evil and predatory, but their contracts explain the obligations of the customer and how much more they’ll have to pay back. Promotional deals, like those on cable or internet, offer good introduction rates but the prices may spike after the promotion. Getting the gist by now is easy. Some of these things may be a lifesaver, but they’re almost always money traps. The "traps" however are broadcast in the company’s contracts so reading carefully can avoid many a financial pitfall.

1. A Little Something on the Side

For many, making a little money on the side can help supplement income or feed into savings. This could be renting out a room on Airbnb or offering services as a freelancer. It could even be snowplowing for neighbors (don’t laugh, I’ve met someone who made a few hundred bucks driving her plow around). The thing to remember is that most people have some valuable skill they can offer, whether it’s writing articles or planning events, which in turn can be turned into a little extra cash.

It’s important to know that everyone has to start somewhere and that a little action is better than none at all. Don’t give up even if your current savings seem far from your end goal.