The Benefits of Saving Money: Set Goals, Spend Less and Save More

The average American isn’t saving nearly enough.

According to a Federal Reserve survey, if faced with an unexpected $400 expense, 32% of American adults say they wouldn’t be able to cover it with cash, savings, or a credit card paid off at the next statement.

Have these savings shortcomings always existed? Not exactly, the data shows.

In the 1960s and ’70s, the typical U.S. family saved about 10% of its disposable income. Today? That average is 5% — barely enough to keep up with inflation. In fact, at the current rate, saving hardly makes a tangible impact.

Let’s take a closer look at the benefits of saving money.

Four reasons why proactively saving is critical to your future

1. Emergencies: We can’t control the unexpected, but we can prepare for it. When trips to the emergency room or broken water heaters sneak up on us, having planned for these expenses can help avoid troublesome loans or credit card debt. A common rule of thumb is to save three to six months’ worth of expenses to have at the ready.  

2. Education: Postsecondary education costs have risen drastically over the years, and many professions and employers still require certain degrees. As students take on more debt, their financial burden rises. A recent U.S. Treasury report shows the average student borrower takes on more than $33,000 in federal loans. Aggressive saving is the easiest way to minimize debt.

3. Major life events: Getting married. Traveling the world. Purchasing a home. Having a child. None of these come cheap. Saving for such milestones helps reduce their inherent stresses and allows you to focus on what really matters.

4. Life expectancy: As we age, our ability to work and earn more money to support our lifestyles will naturally decrease. And with today’s health care and technology advancements, life expectancy has increased, which requires more funds to live securely. Saving now will assist you when work advancements are no longer realistic.

How to set your savings goals

It’s important to set a detailed savings goal before creating a plan.


  • It will help you visualize what you’re tracking toward.
  • It will help you identify responsible ways to achieve your goal without having to take steps backward.
  • It will help you make smart choices when facing “spend vs. save” situations.

Maximize the benefits of saving money by setting S.M.A.R.T. goals

It is best to have a method when approaching your savings goals. Ideally, each goal you set should be:


Simple enough? If not, follow these three steps to help your goals get S.M.A.R.T.:

Step 1: Choose clear reasons to save

Review your future plans and “bucket list” items. What do you need to save for? Remember, saving is a long-term game. The more you practice the basics of saving, the better you will become.

Step 2:  Assess your finances

It’s important to evaluate where your money is going. How much cash flow do you have available, and what’s the right amount of money to set aside each month?

Step 3: Identify your timeline for saving

Based on your finances and available cash, do you need to reduce your spending to save more? If so, where can you reasonably cut costs, and how can you create a timeline for doing so?

Three easy ways to spend less and save more

Now that you’re acquainted with S.M.A.R.T. savings goals, try putting them into action. It’s easier than you might think, and the exercises below can guide you toward everyday savings proficiency.

Consider today vs. tomorrow

Think of what you can get with $10 in your pocket. Perhaps a quick lunch? That $10 isn’t a lot to spend in the grand scheme of things, but it can add up quickly when repeated over time.

Try the $10 experiment

Sticking with $10 as our baseline, make a $10 wager with yourself that you can find $10 each day that you don’t need to spend. (Here’s where that personal budget sheet comes in handy.) Mapping our daily spending helps highlight areas where we spend more than we’d like, and it can also help correct it.

Rather than a one-time trial, let the experiment become a routine. If you win the wager with yourself, you’ve found $10. Now consider saving it.

As you master the habit, try increasing your daily saving amount. It’s $10 now, but how about $20 next month and $25 or $30 the month following? After a year of diligent experimenting, your savings could be well into the thousands of dollars.

Ultimately, the $10 experiment is meant to help you start down a path of saving. Customize it to fit your lifestyle, whether that involves daily, weekly or even monthly saving.      

List five future goals

Writing goals down helps keep us mentally accountable.

Find a sheet of paper or open a “Notes” app, and then list five big things you’d like to begin saving for – this could include a two-week European vacation, or maybe you’d rather build equity in your home by finishing the basement or remodeling the kitchen. 

Now jot down five things you regularly spend money on that you could do without. For instance, do you pay for cable and internet plus multiple streaming services? Maybe it’s time to take stock of what you actually watch and drop the one you use the least.

DON’T WORRY: Just because you list something doesn’t mean it must go. It simply makes you aware of areas you could address.

Three places to consider saving your money

Now that you’ve acquired some tips and tricks for saving, the question becomes: Where can you store that money?

Your unique situation will help determine what’s right for you, but here are four proven ways to keep your hard-earned money safe.

1. Checking accounts

Checking accounts are perfect for handling everyday expenses, paying bills and managing finances. While they tend to offer lower interest rates and sometimes no interest, they conveniently provide unlimited access to your money.

2. Savings accounts

Options vary, but for those needing simple ways to set money aside, it’s hard to go wrong with regular savings accounts and youth savings accounts. Both offer variable interest rates and free online banking to track savings progress. 

Money market accounts are similar to regular savings accounts, except that money market accounts typically earn a higher rate of interest. Plus, money market accounts offer the ability to write checks.

3. Certificates of deposit (CDs)

A certificate of deposit (CD), is required to keep a balance for a certain length of time, but may pay a higher interest rate than a savings or money market account. Penalties are possible if the account holder withdraws money prematurely.

While most account types are comparable, the primary differences among them are the interest rates offered and the ways you can access deposited funds.

Before opening an account, take time to evaluate your needs and study the saving options your bank offers.

Fortunately, most traditional account types – including checking, savings, money market accounts and CDs – are FDIC-insured up to a specified amount. However, some banks don’t offer FDIC insurance, so make sure to confirm with your banker.

Want more savings information or support?

No matter how much experience you have saving, there’s always more to learn. The good news is that you don’t have to go through it alone and you don’t have to become an expert today.

Talk to a knowledgeable banker. Explain your goals and see what resources are available. Or compare account options to determine what’s right for you.

The benefits of saving money are endless, and doing so intelligently is one of the best ways to fuel our individual financial journeys.




Personal Banking

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