SUZE Orman is urging households to kickstart their savings, beginning with just $10 a week.
If you then gradually increase the cash you put aside, you could boost your bank balance by thousands of dollars within just a year.
It comes as Americans’ biggest regret is not saving enough for emergencies, according to a May study by Bankrate, topping 20% of respondents.
It was closely followed by not saving enough for retirement, of which 19% of people saw this as their biggest financial regret.
No matter what you’re saving for, money expert Mrs Orman has shared three key tips for boosting your bank balance in a blog post.
You start by putting aside small amounts to then increase them as you become more savvy with your spending.
1. Set a small goal to spend less
Mrs Orman recommends households to set a small goal to spend less, starting with $10 a week for the first month.
This can be achievable by always asking yourself when shopping: “Is this a want or need?”, she added.
To save $10 a week, you can cut out the daily coffee over the week or a takeaway for one.
The next month you then double up your saving-by-spending less goal to $20 a week, and keep on increasing the savings, Mrs Orman said.
Starting small can help build confidence, meaning you’re more likely to increase your savings down the line.
If you can push your savings to $100 a week by the third month and keep these levels until a year is up, you’ll have $4,520 in savings.
To make your cash go even further, put the money in an account paying interest.
2. Make it automatic
To make sure you don’t forget about saving cash or to remove the temptation to spend the money, it’s worth making it automatic, Mrs Orman said.
You can do this by signing up to digital tools and apps such as Chime or Acorns, but keep in mind the latter charges from $1 a month.
Alternatively, simply set up a standing order from your account for the same day each month.
If you have a workplace retirement plan, the savings will be automatic for this, Mrs Orman added.
Or if you have an Individual Retirement Account (IRA), you can create the same automated saving here too.
3. Save more into workplace plan
If you’ve started a new job in the past few years, you were likely “auto-enrolled” in a workplace retirement plan.
But if you didn’t specify how much you wanted to contribute each month, you would’ve been given a default rate, Mrs Orman said.
Many plans set your initial contribution rate at 4% or even less, but the money guru reckons it’s worth to save at least 10% or 15% of your salary.
To find out how much you’re contributing each month, check your payslips and contact your HR department.
There are a bunch of different retirement plans available – check out the Labor Department website for more information.
Suze Orman recently also revealed how to get a free $100 cash bonus by saving money for 12 months.
Plus, she’s urged parents not to “waste” child tax credit payments of up to $300 with her five top tips.
We round up eight ways to earn free money, including reward websites and 401k boosts.