There’s just no sexy way to say, “let’s talk about that savings account.” It’s a boring, overdone topic — and yet, here I am putting this yawnfest out there. The nerve, right?
The thing is, setting money aside every week or month for an extended period of time is hard. I’ve tried all the tricks: from moving money to the savings account automatically, to saving my raises, to taking surveys for cash. I’ve also lived with big paychecks and small ones.
No matter how much I make or where I stash the dough, there’s always, always something to spend it on.
The Elusive One-Way Savings Jar
What I need in life is a one-way piggy bank. You can drop the money in, but you can’t get it out — at least without losing a finger or something drastic like that. Shattering piggy into a thousand pieces isn’t severe enough. Nor is getting penalized for cashing out your bank CD early. Trust me, I’ve done both.
Up until recently, the only long-term strategy that’s worked for me is a healthy 401(k) contribution. I made a practice of setting the contribution percentage to at least what my employer would match, and then also a bit higher than my comfort level. And then I’d increase it anytime I got a raise.
While I did save a nice chunk of change that way over the years, that money doesn’t help me one bit today. I can’t use it to pay off debt or buy clothes or even to pay my annual HOA fees. And, now that I’m a self-employed lady, the 401(k) piggy bank is closed. Which put me back to the old habit of spending every dime I make — some on clothes for me and even more on clothes for my horse.
Since I Couldn’t Rig the Piggy Bank
Maybe I could have tried to rig a piggy bank to chew off my fingers, but that’s seems so extreme! Fortunately, I found an easier, more effective way to save. My savings hack and newest personal finance obsession is an app called Rize, and it’s changed the way I manage money.
If you’re having trouble putting away even a tiny bit, give Rize a look. If it works for you as it has for me, you’ll be sitting on a nice savings balance this time next year. Use my link and you’ll get $5 deposited in your account just for signing up. (FYI, you can then earn $5 for referring your friends. Just sayin’.)
How Rize Works
Rize is goal-based saving. You set up a goal and a target date for that goal. You can then adjust the timeline so you’re comfortable with how much you’re saving, how often. Then, link up your bank account with Rize and the savings happen automatically — Rize grabs the money from your account and allocates it towards your goal(s).
Now you’re wondering why this is different from any old savings account. I had the same question. Here’s what’s better about Rize:
- You earn a healthy interest rate on your Rize balance, 0.90% APY. That’s, oh, about 15x the national average.
- The money is tucked away from your regular checking and savings accounts. You can transfer it back whenever, but the separation makes it easy to forget the money’s there.
- You can label small pots of savings for very specific things. I have four Rize goals right now, and I track my progress on each separately.
- You can earn $5 for referring your friends to Rize.
- You cannot pay bills or shop with your Rize funds, unless you move them back to your bank account.
- You can opt in to save more with Rize Boost and Rize Accelerate. Rize Boost randomly scrapes change out of your checking account. I use this and a few bucks a week really adds up! Rize Accelerate increases your monthly savings by 1% each month.
How I Use Rize
I started with Rize earlier this year and I’ve saved over $6k already. Go me! That’s a lot inside of a year, but it will seem more reasonable when I explain how I use it.
Right now, I’m using Rize to save for:
1. Big bills that only arrive annually or quarterly: HOA, insurance, etc.
I really dislike annual bills like my HOA fees, car insurance, etc. A person smarter and more disciplined than me would save a little each month so that when those big bills arrive, the funds are ready to go. I would think about doing that, but it never really worked out and I’d end up taking the money from my savings.
Now I set that money aside with Rize. I haven’t touched a penny of it so far.
2. A remodel loan that’s due in full next year.
An expected structural issue at home prompted us to take out a loan to get the work done. We qualified for a “same as cash” deal for 12 months, which normally I would run away from, screaming. I hate these deals because if you still owe even 5 cents after the 12 months, you get slapped with retroactive interest.
With Rize, I’m setting aside 1/12 of the total balance each month. Since I make interest on those savings, I’m not going to send a single payment to the lender until the week before it’s due in full. At that point, I’ll pay it off without having paid a dime in interest.
3. Extra spending money for holiday shopping and splurgy stuff.
This is where the clothing budget comes in. I don’t spend too much on clothes every month — but I do end up buying splurgy pieces two or three times a year. Fall and spring are the culprits. In the fall, I stock up on coats and sweaters and shoes. In the spring, I might need a few dresses for weddings and other occasions and I generally feel the urge to refresh my sandal options.
Now that I’m stashing cash in Rize regularly, I can make those wardrobe updates without feeling guilty about it.
4. Emergency fund for unexpected expenses.
The emergency fund is pretty self-explanatory: we set aside a little every month. It’s there for unexpected and, hopefully, keeps us from gutting our savings account when bad stuff happens.
So that’s how I use Rize, my newfound savings hack. Do you have savings ticks to share? Let us know in the comments!