Saving money can be stressful, especially if you’re starting from scratch or haven’t always been diligent about doing so. As Business Insider reported in August 2020, the average American family has about $40,000 in savings, but this number can be vastly affected by a person’s age, race, or familial status. (For example, the average Black American had $8,600 in savings, per BI’s report; by contrast, the average white American had $51,400 in savings. Pervasive, systemic issues like wage gaps along gender and racial lines can contribute to this in myriad ways.) And while it can be easy to feel despair at headlines that allege how much money someone “should have” in savings by an arbitrary age, it’s possible to take meaningful steps today to save just a little bit more money.
Take, for example, this simple tip that came up time and time again when I asked friends and Apartment Therapy readers about their favorite savings hack. In short, they all recommended setting up your savings account at a separate institution from where you typically handle your checking.
As Folu, the creator of the Unsnackable newsletter, told Apartment Therapy, doing so helps keep your savings out of sight and out of mind, so you’re less tempted to dip into it for any old thing. “I grew up in a family that was big on budgeting and financial responsibility so my parents had me making budget spreadsheets from when I was in middle school but budgeting as a grown up is so much harder because there are always fun things to buy and unexpected expenses,” she said. “I learned that hiding a bit of money in a place where I wouldn’t see it every day helped me to slowly feel like I could have a cushion in case anything bad happened, and also gave me room to save towards my other, less serious goals like traveling.”
Alyssa, a reader who learned this trick from her mom, agrees that it helps funds add up — especially if you set your direct deposit up at work so that a portion of every paycheck automatically goes to that account. “This is scaleable!” she notes. “In the beginning I would put $50, maybe $100 a month. It was very easy to do, and I was glad to have it for ‘oh crap’ expenses.” Because, hey! Life happens, and it’s good to have a cushion for those unforeseen problems.
Alyssa has since migrated all of her accounts to one bank because she feels more comfortable with her savings habits, but the switch wasn’t made without careful consideration. “By that point I was in the habit of ignoring my savings,” she said. “Plus, I’m pretty sure those savings helped me pay for my first Real Adult Vacation… at 29.”
And another reader, Yahaira, promises that you likely won’t even notice the savings being siphoned off into another account — and if things are tight one month, you can always adjust how much you save, or even use the account. (That’s what it’s there for, after all!) “I chose to put 20 percent into my savings and although I would dip into it when things got tight, I was still able to save enough money to get me through an unemployment phase,” she says of her first foray into building a savings account. “Right now, I am not saving because I can’t afford it but I plan to do it once some debt goes down.”
It’s always important to read the fine print of any bank before you open up a new account, and check for any potential fees. If you keep a certain amount of money in your account, or make a certain number of deposits into the account, some banks will waive these charges, so keep an eye out for what makes the most sense for you.
As for how much you save each month, that will depend on your income, debt, and what kinds of savings goals you have. As a general rule, many experts recommend saving 20 percent of each paycheck, but that might vary based on things such as cost of living, or whether you’re self-employed or a freelancer. And if you’re really unsure about how to get started with savings, you can always talk to an accountant about your options.