5 Ways I’m Thinking Differently About Saving Money (2024)

It may not be a prime time to be a spender, but I’m learning it’s a pretty good time to be a saver.

Interest rates on high-yield savings accounts and certificates of deposit are the highest they’ve been in over a decade. The top HYSAs and CDs offer annual percentage yields between 4% and 5%, based on the banks we track at CNET.

Except nearly 1 in 4 US adults have no emergency savings, so they can’t take advantage of those returns. Not surprisingly, members of my age group (Gen Zers between 18 and 26) are more likely to have little to no emergency savings than older generations, according to Bankrate.

Though inflation is still high, it’s slowly going down, meaning our dollar can start to stretch a bit further than it did last year. Still, Gen Zers have 86% less purchasing power than when Baby Boomers were in their 20s, according to Consumer Affairs. Wages just haven’t kept up with the cost of living over the decades.

Today is National Savings Day. If you’re like me and set goals around marked holidays, read below for how I’m forcing myself to rethink my savings strategy.

Savings and CD rates are changing rapidly across banks and accounts. Experts recommend comparing rates before opening an account to get the best APY possible. Enter your information below to get CNET’s partners’ best rate for your area.

Savings and CD rates weekly update

CD rates are still high, but they’ve remained relatively steady for the last few weeks. While a handful of banks lowered rates for select terms last week, some banks increased rates this week.

Nine-month, one-year and three-year CDs saw small gains, with average APYs increasing to 4.80%, 5.25% and 4.31%, respectively.

The average high-yield savings account rate increased to 4.80% this week, based on the banks we track at CNET. Most banks and credit unions have savings rates over 5%, and Newtek and UFB Direct have rates as high as 5.25%.

Where CD and savings rates go from here will depend on a number of factors, including if the Federal Reserve decides to continue its attempt to bring inflation down by hiking interest rates. Personal finance experts don’t expect CD and savings rates to undergo any significant changes for the rest of the year.

5 ways to start thinking differently about saving

There are loads of tips for saving money (I’ve heard quite a few of them). Before you get started, make sure to set up a deposit account if you don’t have one already. If you want liquidity and the ability to add funds over time, you can securely build your savings and earn the most interest with one of CNET’s recommended top-yielding savings accounts.

1. Set a goal and look at your budget

Whether you want to save for a future down payment on a home, your next vacation or pay off your student loan debt, adopting better saving and spending habits will differ depending on one’s comfort level and economic situation. Setting a personal goal is the first step to help you evaluate your budget and draft a plan.

In my case, I had to make my first student loan payment this month, along with millions of other student loan borrowers. Since I haven’t had to worry about setting aside that cash since I graduated in 2020 (given the pandemic-era federal student loan pause), saving enough to work those loan payments into my monthly budget was a struggle.

I don’t expect to pay off that debt in full any time soon -- that would be an impossible goal. However, my plan is always to cover my minimum monthly payment, which isn’t too unreasonable thanks to an income-driven repayment plan.

Start by setting an attainable goal of how much you can put aside based on the monthly income you have left over after covering basic necessities and household bills. Avoid putting yourself in an even more difficult financial position for the sake of saving beyond your means.

2. Improve your money IQ

Personal finance books are great, but podcasts can also guide you when you’re ready to improve your money IQ. Plus, they’re easy to listen to while driving, on public transit, cooking or walking.

Depending on your goals, there’s definitely a podcast available to help you navigate major financial decisions.

So Money with former CNET Money editor-at-large Farnoosh Torabi showcases candid conversations with experts and other guests on an array of money topics, from savings strategies to financial fear. And every Friday, Torabi answers audience questions on Ask Farnoosh. Torabi’s eagerness to facilitate financial discussions beyond the surface is what ultimately sets her apart from other podcasts.

If you’re trying to navigate saving for the first time like me, How to Money is a podcast hosted by two millennial friends, Joel Larsgaard and Matt Altmix. The duo tackles everyday money topics, from saving to purchasing a home to building credit and securing financial independence. The podcast is great for folks who are just trying to boost their knowledge of basic money management.

There are hundreds of personal finance podcasts out there with content tailored to tackle different hurdles. After you set your first savings goal, do some research to find a podcast that touches on your most pressing money questions.

Engaging with personal finance experts online or social media groups is another way to increase your financial knowledge. Some influencers teach based on their own successes and failures with money while also sharing tips and strategies with their followers.

For example, Rita-Soledad Fernández Paulino, who goes by “Soledad,” is the CEO and founder of Wealth Para Todos, a company that aims to teach progressive BIPOC, women and LGBTQ+ folk how to create a financial plan to retire early. Soledad embraces financial literacy as a social justice issue and has built a community around helping people transform their financial trajectories. She frequently hosts Instagram Lives, where she discusses all matters of personal finance while interacting with viewers and answering questions from the discussion thread.

Keep in mind that if you’re seeking advice from a professional financial adviser, online groups and influencers aren’t a substitute. However, these types of social platforms help facilitate conversations with people going through similar money challenges. Before committing to any new financial decisions, make sure that it actually checks out.

4. Take on a savings challenge

If thinking about saving money makes your head spin, try motivating yourself with a money-saving challenge. Savings challenges can make saving more interesting if you need an extra push to build better habits. But to be successful with a savings challenge, you need to find one that fits your budget and feels attainable.

Here’s a snapshot of a couple of different savings challenges to consider:

• The 52-week challenge: Start by depositing an increasing amount of money into your savings accounts every week for one year. For example, save $1 this week, $2 in week two, $3 in week three, $4 in week four and so on. You’ll save $1,378 by the end of the year. Set your goal for the 52-week challenge based on what works with your budget.

• The no-spend challenge: Challenge yourself to see how long you can go without spending money on nonessential items. Don’t aim to cut spending altogether, since that’s unrealistic. But you can start small by cutting out things like food delivery or Amazon purchases for the week.

• The cash challenge: Having cash on hand can make you more conscious of how much money you’re actually spending. The cash challenge encourages you to have a set amount of cash for your weekly spending and limit yourself to only spending what you took out of the ATM.

• The eating-in challenge: Similar to the no-spend challenge, the eating-in challenge encourages you to make your meals at home instead of eating out. Start by making a detailed grocery list and spending more time meal prepping.

5. Try a different budgeting method

While saving isn’t one-size-fits-all, neither is budgeting. The 50/30/20 budget is a common method, which breaks down your expenses into three categories:

• Necessities: 50%
• Discretionary spending: 30%
• Savings and debt payments: 20%

But this budgeting method is unrealistic if you have substantial credit card debt, student debt or medical debt. And if you live in an area with a high cost of living, chances are you spend more than 50% of your budget on monthly necessities like rent, food and transportation. On the flip side, if you’re saving for early retirement, 20% might be an insufficient savings goal. To build a budget that works, you have to understand your finances and have a realistic goal.

My budget uses the line-item method. I keep track of my bills and preplanned monthly expenses in a spreadsheet. This method works best if you have a fixed income because your finances and income are predictable. But it works for me because I’m aiming to become a more disciplined spender. Since I can visualize my spending into buckets like fixed and variable expenses, debt payments and nonessentials, I hold myself accountable.

More savings advice

• Here’s Where One CFP Recommends Stashing Your Savings Right Now
• The End of High Savings and CD Rates Is Coming. What 1 Expert Wants You to Know While Rates Are Still Up
• Returning Student Loan Payments Will Put a Strain on Savings Goals. Here’s What Experts Recommend