Top Five Savings Techniques

Statistics show that 45% of people who open savings accounts never use them. The problem is that savings accounts require work. When you're ready to make a deposit, you have to withdraw money from your checking account, deposit it into your savings account, and keep yourself from removing money from the savings account once it has been deposited. Because of this, a savings account might not be the best way to build your "nest egg."

If you're interested in saving money for a rainy day, try some of these ideas and see which one (or more!) works best for you. Everyone is different, you can build savings without opening an account.

1. Save Your Pennies

Instead of fishing around in your pockets for two pennies to cover the restaurant total of $14.02, hand the teller a twenty. At the end of every day, take all of the change in your pockets, purse, wallet and car, and throw it into a change jar. You'll be amazed at how fast the change will add up.

When the jar is full, roll it into bank rolls and put the rolls in a shoe box. When the shoe box is full, take it to the bank and cash it in, or move on to a new shoe box. A friend of mine has 54 shoeboxes full of rolled change, and he's decided to use the change as his retirement fund. Of course, he started this when he was ten years old, and he's thirty-seven now, but you can catch up!

2. Tax Day Savings

For yearly savings, arrange with your employer to take more money out of your check for taxes than is required. I have a friend that sacrificed 20% of every paycheck to taxes. Then, when tax day comes around, you'll have a significantly larger tax return, and you'll be able to use the money for new furniture or to start a college fund for the kids. This is a great savings technique, and since you never see the money, it requires no discipline on your part.

3. Purchase Savings Bonds

Savings bonds can be purchased in a variety of denominations and with enormous interest rates. A savings bond allows you to accrue money monthly on the bond, and provides you with a perfect savings technique. Most savings bonds stop accruing after twenty years, at which point you will need to cash it, but until then, you make money by doing absolutely nothing.

NOTE: You do have to pay taxes on savings bonds, so remember that for when you cash them in.

4. Cash Jar

When you were little, you probably had a coin jar in the shape of a bear or a bunny into which you were encouraged to put any coins you received from relatives and the tooth fairy. As an adult, you can use those coin jars as cash jars and save a lot more money.

Every time you have a one dollar bill, but it in the cash jar, and put the jar on a nightstand or dresser in your bedroom. When you can't stuff anymore bills into the jar, empty it and splurge on something you've been wanting. The bigger the jar, the more money you'll have to spend, and if you get really antsy, stick a five or a ten in for good measure.

5. Investments

For the daring individual, safe investments are a great starting point for savings. Hire an experienced and successful broker and get advice on the most profitably stocks. You won't have to do anything if you leave the decisions in the broker's hands, then you won't have to worry about it, and you can cash in your investments whenever you need the money. This is an excellent long-term savings option.

Savings Accounts

And if you just have to have a savings account, here are some tips for making the account more effective.

1. Monthly Transfer

If you're worried about forgetting or failing to make deposits into your savings account, arrange monthly transfers with your bank. This way, a specified amount of money will automatically be transferred from your checking account into your savings account, and you don't have to think about it.

2. Tax Refund Account

If you're planning to save money over a long period of time - several years - deposit all of your tax refunds into one savings account. After ten years, you'll have a hefty sum of money, and even more if both partners of a marriage use this technique. Combined with a monthly transfer, you'll more than double your savings.

3. College Fund

You can start a college fund for your children in the form of a savings account that cannot be touched until your child turns eighteen. This will keep you from the option of making random withdrawals, and will ensure you child's ability to go to college.