Make 2025 The Year You Bolster Your Savings Account
Whether you are saving up for a special trip or just creating an emergency fund for the first time, it's important to use every tool to bolster your savings account. Let's explore easy ways to make a financial safety net in 2025—and how to be disciplined once you've got it.
How To Create A Savings Account
Creating a savings account is simple. You can do this online or by visiting your local bank branch, whichever is easiest. Many banks offer promotions whereby new customers receive a high interest rate on deposits, but these promotions are usually for short periods. You'll need to provide a piece (or two) of government-issued identification and select which type of savings account you want.
An Online Bank Or A Physical Branch?
Should you keep your savings accounts with an online bank or open one at a physical branch? Of course, while many physical banks also have online web portals, many are online-only. As online-only banks don't have to maintain buildings, except for a central headquarters, they generally offer higher interest rates on their savings accounts than traditional banks. Bear this in mind when considering where to open your new savings account.
Most Popular Types Of Savings Accounts
There are many different types of savings accounts in the United States. Let's explore some of the most popular options out there, so you can decide which is right for you, based on your savings goals.
Traditional Savings Accounts
The traditional savings accounts lets you keep money securely in an account you can withdraw from whenever you want, but only earns a tiny amount of interest—sometimes as low as 0.01%. Traditional savings accounts are great for short-term saving, like for a car you'll buy within 3-6 months and have the money for already.
High-Interest Savings Accounts
As mentioned above, high-interest savings accounts, or HISAs, are common across all banks. However, online banks typically offer higher interest rates than traditional banks. Interest rates for these accounts can sometimes reach as high as 6%, and promotions generally run for 4-5 months.
Certificates Of Deposit Accounts
Certificate of deposit accounts, or CDs, are an excellent option for those looking to save medium to long-term. Unlike HISAs and traditional savings accounts, you'll need to keep your money in this account for a fixed period. Different banks will offer different investment timelines, but you should use 3-5 years as a benchmark. CD accounts also offer a fixed interest rate that stays the same over the period you invest for.
Let's Start Saving
Now that you've selected your savings account of choice, you can start saving! Start by defining what your savings goals are. They might be for a new car, a family vacation, or building a three to six-month emergency fund, as recommended by CFA, Michael Gregory.
Check Your Subscription List
Did you know that Americans spend an average of $239/month on subscriptions? Whether your vice is Netflix, Crave, Amazon Prime, or another subscription, checking your subscriptions list is the first step to re-injecting saveable income into your life. Is there a subscription you're not using? Can it and reinvest that money into your savings.
Cut Back On Grocery Bills By Doing The Following Things
Food waste in the United States totals an incredible 92 billion pounds of food annually. It costs roughly $473 billion a year out of American pockets. If you're looking to cut back on your grocery bill, you could do things like: create a weekly meal plan, freeze food for later, don't shop while you're hungry, and cook any food picked up from the discount bin quickly.
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Switch To Audiobooks To Save On Books, Or Use The Library
The library is one of the world's most underappreciated and under-utilized ways of saving money on books. Library cards are often low-cost (or free) and infinitely usable. Or, if you don't care for physical books, you can get your favorite titles on a Kindle or other e-Reader for cheaper than the paperback copy.
Save On Utilities By Using Technology & Upgrading Your Home's Systems
We all know that the price of electricity has skyrocketed lately. But your home may be using more electricity than it needs to, especially if you've recently moved into an older home, or haven't thought to upgrade your home's heating system—savings are there to be had! You'll need to make some investments, unfortunately, but you'll reap the rewards in the long-term.
Installing A Heat Pump & Replacing Aged Doors & Windows
Again, this will require some investment in your property, but replacing oil furnaces, wood heat, or electric baseboards can save as much as $1,000 per year on their home heating bill. Additionally, older windows and doors could have worn down seals that leak heat like it's nobody's business. Consider upgrading your windows and doors to double- or triple-pane to maximize heat retention and increase savings.
Save On Insurance Policies By Shopping Around & Bundling
Did you know that Americans spend an average of $4,500 annually on home and car insurance alone? If you find that your insurance premiums are steadily increasing, 2025 might be a good time to switch things up. Shop around for the cheapest rate using a different insurance broker or company. You can also bundle policies together by running your home and auto insurance through the same company—this will also save you money if you're a long-time customer.
Stop Doom Spending
"Doom spending" is the habit of spending money when under stress—"retail therapy", as it used to be called. Nearly 35% of Gen-Zers do this often—that number is 43% for millennials. If you're one of the people who "doom-spend", you may be costing yourself thousands of dollars annually. Instead of doom spending when you're stressed, go for a walk or run rather than browsing Amazon.
Hit Pause On Your Online Shopping
Of course, we don't mean never buying your groceries online. But create a habit of hitting pause on your online shopping at least once a year. Make a conscious choice to ignore or unsubscribe from those marketing emails from your favorite brands, or block access to your Amazon account for a month. See whether that makes a significant difference to your monthly budget, then put that money into your savings account.
Pay Down Your High-Interest Debt
Total household debt in the US as of Q4 2024 was $18.06 TRILLION. If you're one of millions of Americans with high-interest debt, whether that's credit cards, car loans, or other debts, pay these off first. When you create your monthly budget, set aside a portion to pay down your highest-interest debts first. This will free up more money once they're paid off to funnel towards long-term savings goals.
Max Out Your Employer's 401(k) Match
If your employer offers a 401(k) match, you should be maxing that out annually as fast as you can. When you add your monthly contribution to your retirement account, your employer will match that (up to a certain amount). Try and max out your 401(k) match every year to maximize the amount you'll earn in retirement.
Delete Your Automatic Billing Information From Amazon & Elsewhere
It's a psychological thing, but having your billing information automatically input into a webpage decreases the likelihood that you won't buy the item. It's like paying for things with cash; it's harder to break a $20 than it is to tap a card. To save more, delete your billing information from your Amazon account, Google Wallet, and anywhere else you regularly spend money on unnecessary items.
Find A Side Hustle
Nobody wants to live to work and work to live, but if there's a savings goal that you're really passionate about—like a family vacation or a new car—then consider finding a side hustle if there's no room in your current monthly income to set aside funds for that purchase. Side hustles can be as simple as mowing lawns in your neighborhood, selling wares at markets or online (if you're a creative person), or even dog walking or house/dog-sitting.
Create A Savings Challenge For Yourself
Dopamine is a powerful tool. Start getting your financial dopamine hit by creating (and hitting) savings challenges for yourself. It could start as simple as: "I'm not going to buy coffee out this week". Or, "I'm going to save $1,000 over the next six months to begin my emergency fund". By making these savings goals into something of a game or challenge, it's going to feel better when you succeed at them—which (hopefully) is all the encouragement you'll need to keep saving.
Pay Off Your Mortgage As Soon As Possible
While your home will likely be the last major asset you pay off, if possible, try and expedite this process by either saving a larger down payment for a home than is typical (20%), or put more money toward your mortgage every month, if you can afford it. Once your mortgage is paid off, you'll likely have hundreds of extra dollars every month to put toward retirement, or travel, or whatever else you want to do in life.
Automate Your Savings
Finally, one of the most powerful tools you can use is automated savings. These are recurring transactions that you set up at your bank to go out of your checking account (where your paychecks are deposited) and into a savings account of your choosing. You could even set up multiple recurring transactions, so that you're depositing money into all of your savings accounts simultaneously, if you have more than one.
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