We have all been there, we do our best to start a savings account because we know it’s the right thing to do. But then, money gets tight and we transfer money from our savings to get us through. This process used to be much harder but with all banking being mostly online, it’s getting easier and easier. So what can you do to stop taking money out of savings and start actually…well, saving? I’ve got the serious, no BS breakdown for you to stop making un-planned withdrawals and actually start saving (and making) money!
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Find out where your money is going
Chances are, if you continuously take money from your savings account it’s because you are not really paying attention to where all of your money is going
You put money into savings with good intentions, then a few days after getting paid, your bank account is $0 and you are forced to take money out of savings.
If this sounds like you, then more than likely you are spending your money on a lot of wasteful things. Yeah, maybe you already know that.
The best way to actually find out where your money is going is to do a spending re-cap.
How to do a spending re-cap
A spending re-cap is super simple and can be very eye-opening. Here is a quick break down of what you need to do for a spending re-cap:
- Gather your last 3 months worth of bank statements
- Categorize you’re spending
- Fast food
- Happy Hour
- New shoes
- Impulse purchases
- Online shopping
- Highlight the items you purchased that weren’t necessary
- Look for consistent trends on where you wasted money
- Take note of bank fees and unknown transactions
Eliminate Unnecessary Spending
Once you have an idea of the places where you are wasting your money, start gathering ideas on how to eliminate these distractions.
If you are going out every day for lunch with co-workers. Start planning a lunch 4 days a week and plan one day to go out for lunch.
No matter what your vice, come up with a game plan for how to avoid getting tempted or distracted.
Cutting off your major spending struggles at the source is one of the best ways to stop taking money out of savings and start keeping more in your own pocket.
How to ditch top financial blunders:
- Eating out for lunch – Pack a lunch, pick one day a week to go out, stop paying for extras like soda or dessert.
- Discount shopping – Unsubscribe from text notifications, mail and emails that tempt you into spending
- Amazon addiction – Amazon has made it super easy to spend mindlessly. If this is an area of struggle, canceling a Prime membership could save you!
- Gourmet coffee – Make coffee at home. It’s easier than you think!
- Out to eat – A great way to get a hold of your out to eat expenses is by creating a budget so that you have the freedom to spend but are still setting healthy limits. You can also take advantage of reduced-price gift cards.
Eliminate the extras
A major mistake people make when they say they don’t have enough money is that they do have enough, they are just spending it on other things.
If you are paying a cable bill each month or have an unused gym membership then you know what I’m talking about. Maintaining these high-cost items is just taking money directly out of your wallet each month.
What most people don’t consider are more cost-effective ways to save on their biggest bills.
How to reduce your bills
- Digital antenna – Instead of paying the high price of cable each month, you could save thousands of dollars each year by getting a digital antenna instead.
- Sling TV – Sling TV is a streaming service that brings you all of your favorite shows for only $25 per month. That’s around a $100 or more savings when compared to cable.
Aaptiv– Get personal training and guidance for only $15 per month and get the first month free. With the average gym membership costing around $69 per month, this is a huge savings.
- Ting – Ting phone plans average around $25 per month. You set your own limits and choose how much you want to pay instead of locking into an iron-clad contract with other phone companies.
- Trim – Trim is an app that will review your monthly bills and find cheaper payment plans for you. Learn more.
- Charlie – Not a savings app just a great way of getting messages to help you reduce your bills, save for the future and even find free money. On average people are saving $80 per week with Charlie!
Adjust your budget
If you are consistently pulling money from savings there are two things you can do when it comes to your budget:
Start a budget – Check out my simple budget bundle for people who don’t like to budget.
Another great option is to create a digital budget online with
Tweak your budget – If you already have a budget, but continuously take money from your savings, then there might be some areas where you need to be little more flexible in your budget.
People believe a budget is limiting but really it allows you to be in full control of the money you work so hard to earn.
So start taking control and telling your money where to go. Get started on a budget that works for you.
Additional budgeting resources:
- Create a Simple Budget with a Piece of Paper and a Smartphone
- How to Discuss and Execute a Budget with Your Spouse
- The Beginners Guide to Zero Based Budgeting
Pay off your debt
Another must-have way of creating more money without working more is by paying off all of your debt.
My favorite way to pay off debt helped our family become debt free in 3 years is the Debt Snowball. Here is a quick 5 minute video tutorial of how the Debt Snowball works to get you out of debt and get more money in your savings account.
Start getting paid to save!
Now here’s an idea. What if you had a savings account that you couldn’t easily take money from?
Why not make it happen?
Most people who have a savings account have one through their local bank. The same bank that they have their checking accounts with.
What most people don’t’ realize is that their savings account
isbarely making them any money in interest or maybe is even taking money from them.
Setting up a savings account that is separate from your main bank is one of the best ways to avoid transfer temptation and to start actually getting paid to save.
Online accounts pay 200 times more!
The average savings account at a bank pays you around .01% in interest on what you save. Not that impressive.
Online banks, however, offer benefits that not many people are aware of. Here are two of the best online savings account options to help you make more money on your savings.
- Money market account – Open a money market account with CIT Bank to get a 1.85% return on investment.
- Savings Builder – Get a 1.90% interest rate with CIT Bank by depositing only $100 per month into a Savings Builder account!
- Capital One 360 – You can save 5 times the national average with a Capital One 360 savings account.
Have an emergency fund
Sometimes you might take money out of savings because you over-spent on silly purchases. Other times, maybe you have to take money out of savings because you have an actual real-life emergency.
The scary truth is about 50% of people would not be able to afford a $1,000 emergency? Do you fit
Having a savings is a big deal and is something you should definitely do not only to prepare for retirement but to help yourself be prepared in case of an emergency.
The one thing about unexpected emergencies that people always forget is that they are never unexpected. We know emergencies are going to happen in life. That’s why it is so important to prepare for them.
Plan for the fun stuff
Most likely the fun stuff is what got you in trouble in the first place. It’s the reason you are taking money out of savings
Making a budget plan for the fun stuff in life helps you stay on track financially. A fun money budget also helps you keep your priorities straight
When you only have $100 of fun money to spend, it might make you think twice about that $75 hat you see at the mall.
I am a big believer in fun money and it’s something I encourage everyone to include in their budget.
Make saving fun
Saving is tough because it doesn’t always bring instant gratification like shopping or going out to eat. That’s why I have an awesome savings tracker chart to help you make saving a little bit more exciting.
henever you add money to your savings, you can physically write it down and color in your savings jar. This helps get you a little bit more excited and allows you to visually see how much money you’re saving when you stop taking money out of savings.
Try the cash only method
When we use debit and credit cards, we don’t actually feel (or visually see) our spending taking place. Stores know this and are working to make it easier and easier for us to mindlessly spend
Stores benefit from the convenience of plastic!
Instead, after doing your monthly budget, head to the bank and take out cash!
When you are physically seeing your money disappear, you tend to be a lot more aware of it and less likely to need to take money from savings later on.
Don’t have a savings account debit card
Some banks will offer you the “convenience” of having a debit card for your savings account.
But, as I said above, this is beneficial to everyone but you.
Having a debit card for your savings account only makes it that much easier for you to take from your savings whenever you feel the need. Cut up this card and let your savings stay put!
Sign up for automatic withdrawals
When life has hit us hard it makes it more tempting to not even put money into savings.
It’s so important to make sure you are having your savings automatically withdrawn as soon as you get paid. You can do this easily with the Savings Builder online savings account and it only requires a $100 per month commitment!
Make your savings untouchable
If you really struggle to save, there are ways that you can make your savings virtually untouchable.
While retirement accounts like IRAs or 401Ks are going to be the more financially beneficial option, there is still that temptation to remove the funds whenever you need.
Taking money from an IRA or 401K is never a good idea!
There are however, other ways to make dipping into your regular savings a little more difficult.
If you have a significant savings, you might consider putting it into a CD for 5 years so that it can earn interest and you aren’t tempted to take anything out!
Create an additional income
At the end of the day, no matter what tips I give you or strategies you try, there may just be a shortage of cash in your life.
If this is the case, you are in luck because there are so many ways to make money these days … it’s kind of crazy. Whether you need to work from home or have more flexibility, there are a lot of easy-start part time jobs that you can be taking advantage of to increase your income.