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8 SIMPLE WAYS TO SAVE MONEY

Saving is easier when you have a plan—follow these steps to create one

Read, 3 minutes

Sometimes the hardest thing about saving money is just getting started. This
step-by-step guide can help you develop a simple and realistic strategy, so that
you can save for all your short- and long-term goals.

1


RECORD YOUR EXPENSES

The first step to start saving money is figuring out how much you spend. Keep
track of all your expenses—that means every coffee, household item and cash tip
as well as regular monthly bills. Record your expenses however is easiest for
you—a pencil and paper, a simple spreadsheet or a free online spending tracker
or app. Once you have your data, organize the numbers by categories, such as
gas, groceries and mortgage, and total each amount. Use your credit card and
bank statements to make sure you’ve included everything.

MORE FROM BANK OF AMERICA

Bank of America clients can access the Spending & Budgeting tool in Online and
Mobile Banking to automatically categorize transactions for easier budgeting.

2


INCLUDE SAVING IN YOUR BUDGET

Now that you know what you spend in a month, you can begin to create a budget.
Your budget should show what your expenses are relative to your income, so that
you can plan your spending and limit overspending. Be sure to factor in expenses
that occur regularly but not every month, such as car maintenance. Include a
savings category in your budget and aim to save an amount that initially feels
comfortable to you. Plan on eventually increasing your savings by up to 15 to 20
percent of your income.

3


FIND WAYS TO CUT SPENDING

If you can’t save as much as you’d like, it might be time to cut back on
expenses. Identify nonessentials, such as entertainment and dining out, that you
can spend less on. Look for ways to save on your fixed monthly expenses, such as
your car insurance or cell phone plan, as well. Other ideas for trimming
everyday expenses include:


SEARCH FOR FREE ACTIVITIES

Use resources, such as community event listings, to find free or low-cost
entertainment.


REVIEW RECURRING CHARGES

Cancel subscriptions and memberships you don’t use—especially if they renew
automatically.


EXAMINE THE COST OF EATING OUT VS. COOKING AT HOME

Plan to eat most of your meals at home, and research local restaurant deals for
nights that you want to treat yourself.


WAIT BEFORE YOU BUY

When tempted by a nonessential purchase, wait a few days. You may realize the
item was something you wanted rather than needed—and you can develop a plan to
save for it.

4


SET SAVINGS GOALS

One of the best ways to save money is to set a goal. Start by thinking about
what you might want to save for—both in the short term (one to three years) and
the long term (four or more years). Then estimate how much money you’ll need and
how long it might take you to save it.

Common short-term goals: Emergency fund (three to nine months of living
expenses), vacation or down payment for a car


Common long-term goals: Down payment on a home or a remodeling project, your
child’s education or retirement


QUICK TIP

Set a small, achievable short-term goal for something that’s fun and goes beyond
your monthly budget, such as a new smartphone or holiday gifts. Reaching smaller
goals—and enjoying the reward you’ve saved for—can give you a psychological
boost, making the payoff of saving more immediate and reinforces the habit.

5


DETERMINE YOUR FINANCIAL PRIORITIES

After your expenses and income, your goals are likely to have the biggest impact
on how you allocate your savings. For example, if you know you’re going to need
to replace your car in the near future, you could start putting away money for
one now. But be sure to remember long-term goals—it’s important that planning
for retirement doesn’t take a back seat to shorter-term needs. Learning how to
prioritize your savings goals can give you a clear idea of how to allocate your
savings.

6


PICK THE RIGHT TOOLS

There are many savings and investment accounts suitable for short- and long-term
goals. And you don’t have to pick just one. Look carefully at all the options
and consider balance minimums, fees, interest rates, risk and how soon you’ll
need the money so you can choose the mix that will help you best save for your
goals.


SHORT-TERM GOALS

If you’ll need the money soon or need to be able to access it quickly, consider
using these FDIC-insured deposit accounts:

 * A savings account
 * A certificate of deposit (CD), which locks in your money for a fixed period
   of time at a rate that is typically higher than that of a savings account


LONG-TERM GOALS

If you’re saving for retirement or your child’s education, consider:

 * FDIC-insured individual retirement accounts (IRAs) or 529 plans, which are
   tax-efficient savings accounts
 * Securities, such as stocks or mutual funds. These investment products are
   available through investment accounts with a broker-dealer1

 1. Remember that securities are not insured by the FDIC, are not deposits or
    other obligations of a bank and are not guaranteed by a bank. They are
    subject to investment risks, including the possible loss of your principal.

7


MAKE SAVING AUTOMATIC

Almost all banks offer automated transfers between your checking and savings
accounts. You can choose when, how much and where to transfer money or even
split your direct deposit so that a portion of every paycheck goes directly into
your savings account.

MORE FROM BANK OF AMERICA

With Mobile & Online Banking, Bank of America clients can easily set up
automatic transfers between accounts.

8


WATCH YOUR SAVINGS GROW

Review your budget and check your progress every month. That will help you not
only stick to your personal savings plan, but also identify and fix problems
quickly. Understanding how to save money may even inspire you to find more ways
to save and hit your goals faster.