There’s arguably no quicker way to determine the health of someone’s finances than to look at their money-saving habits. Reserving funds for the future is one of the most important components of a responsible financial plan. Whether you’re putting money away for an upcoming home renovation or to prepare for an emergency, your savings account will give you peace of mind.

If you currently have little to no money held in reserve for a rainy day, it’s time to make a change. Even small adjustments to your spending habits can have a huge impact on your financial security down the road. Even if you’re living paycheck-to-paycheck, it’s almost always possible to save some cash if you’re strategic and disciplined. Here are five personal finance tips that make it easier to build your savings over time.  

1. Be Strategic With Your Mortgage Payments

For most people, the biggest monthly expense is their mortgage payment. This is a necessary expense unless you’re able to pay cash for your home. What most homeowners don’t realize is that it’s possible to decrease your monthly payment and pay your loan off faster. Once you pay your loan off, you’ll have a much greater ability to rapidly grow your savings account.

Imagine you have a 30-year fixed-rate mortgage that you make monthly payments on. If you switch to bi-weekly payments and pay half of your mortgage every two weeks, you’ll make one full extra payment each year. That may not sound like a lot to you. However, applying one extra payment to your principal each year on a $200,000 mortgage could save you nearly $50,000 in interest over the loan’s lifetime.  

2. Compare Insurance Quotes

Buying insurance isn’t on anyone’s list of favorite to-dos. Many people rush the process and don’t take sufficient time to make sure they’re getting the best deal. Whether you’re selecting a policy for your health, home, or automobile, the worst thing you can do is settle on the first one you find. Instead, commit to shopping around and comparing policies so you don’t spend more than you need to each month.

Keep in mind that cheaper isn’t always better when it comes to insurance coverage. That’s why it’s essential to compare apples-to-apples policies that offer the same general coverage options. If you’re requesting a house insurance quote from multiple providers for price comparison purposes, don’t compare a bare-bones policy to a higher-quality one. Instead, make sure all the policies you review offer the coverage you want and are issued by reputable insurers. Only then should you choose the better-priced option among them.

3. Lower Your Monthly Utility Bills

Depending on where you live, your monthly utility bills might be sky-high during certain times of the year. Utilities may seem like a rigid monthly expense you don’t have much control over. However, most people can bring their bills down with a little effort. If you want to save money each month, becoming more energy-efficient can put you in a better position to meet your goal. 

Getting an energy audit is one of the best places to begin if you’re serious about conserving energy. You may qualify for a free professional home energy assessment, if your state offers them. Sometimes, energy companies will also provide one free energy audit per year to customers. Energy assessors often check for air leaks, insulation, HVAC inefficiencies, and the age and condition of appliances. You could save anywhere from 5% to 30% on your energy bill if you make the improvements recommended by your assessor.

4. Pay Yourself First

If your savings account is the last priority in your monthly budget, it’s unlikely to grow. You’ll probably find a dozen other places you’d rather put your money. That’s why it’s essential to pay yourself first each time a check comes in. Many experts recommend putting 20% of your monthly income into savings. If you can’t do that, remember that any amount is better than nothing.

One easy way to pay yourself first is by setting up a split deposit system with your employer if they offer the option. This is when a percentage or certain dollar amount of your paycheck automatically gets deposited into your savings accounts while the rest goes into checking. You don’t have to think about the process or convince yourself to move the money over. It’s one of the easiest ways to consistently build long-term savings.

5. Use the Envelope Budgeting System

There’s an old saying claiming that if you fail to plan ahead, you’re actually planning to fail (whether you realize it or not). This is especially true when it comes to personal financial management. Without a plan (i.e. a budget), you could spend yourself into massive debt in minimal time. The problem with traditional budgeting methods is that they tend to have a poor follow-through rate. It’s easy to come up with a savings-oriented budget, but adhering to it is another story.

Many people find it easier to stick to a budget when they use the envelope system (also known as “cash stuffing” on TikTok). This system involves portioning out your monthly income into envelopes based on spending categories. For example, you’ll put a specific amount of cash into envelopes labeled “groceries,” “rent,” “entertainment,” and any other relevant categories. This system can make it easier to stick to a budget. Once the cash is gone from an envelope, you can’t spend any more money on that category for the rest of the month.   

You can’t predict or control the future, but you can control how prepared you are to meet possible financial challenges. Building a healthy savings account should be one of your top monetary goals. Follow these tips and create a more savings-centric approach to your personal financial strategy.