Utilities, Netflix, mortgage and insurance payments, and other bills can be paid automatically from a checking account, or in some cases a credit card, eliminating a monthly chore and avoiding late payment penalties and fees. To pay back credit card spending, automate at least the minimum payment to avoid late payments, which incur fees and damage credit scores.
Overdraft protection sounds helpful, but often banks charge about $35 for the "help" of covering payments that exceed what customers have in their checking accounts. Linking a checking account to a savings account and line of credit is a better way to cover overdrafts but still incurs transfer fees of about $5. As of July 1, 2010, overdraft protection is automatically disabled for new checking accounts, but people with older accounts may want to contact their banks and opt out. Writing checks can still lead to overdrafts, but try to use a debit card without enough funds and it will simply be declined. It is an inconvenience, but a money-saving one.
ATM fees cost more than $4 on average, and the cost can add up over time. Even presidential candidates are talking about it; Democrat Bernie Sanders, who has been complaining about the fees for decades, has said he'd cap them at $2. Savvy consumers can avoid the fee altogether by switching to a bank or credit union that refunds ATM fees.
Rather than logging into a checking account regularly and manually requesting a transfer to a savings account, set up an automatic transfer. Account holders can pick the date to time transfers with paydays. Some employers even split up direct deposits between multiple accounts, saving workers from having to do it.
Two tech startups are making it easier to automate savings. Digit analyzes users' spending habits and moves money from their checking account to a federally insured savings account every few days. Acorns rounds up the amounts paid with a credit or debit card and puts the difference into an investment account.
Some employers match a portion of worker 401(k) contributions. Contributing enough to get the full amount of "free money" offered by the employer is often a good idea. Just be sure the total contribution doesn't exceed the maximum allowed by the Internal Revenue Service ($18,000 this year, or $24,000 for those 50 and older). A CalcXML tool can help figure out how to maximize employer matching.
Workers who don't have an employer-sponsored retirement account with matching can still set up automatic contributions to a traditional or Roth Individual Retirement Arrangement. Even without the matching, IRAs offer tax advantages that can be worthwhile to investors. For a low-fee, hands-off management approach, consider investing in a target-date retirement fund or using a roboadvisor.
There are a couple of tactics to try if there doesn't seem to be room in the household budget to put more money in savings. First, try increasing the amount you regularly put away just a tiny bit -- even a few dollars a week can make a significant difference over time. Another method is to increase how much money goes into savings only after getting a raise at work, with half the additional income going to savings and half to spending.
Getting quotes from multiple insurance companies can be a pain, but it can pay off. If that seems like too much work, call current insurance providers and ask about available discounts. Sometimes small changes, such as buying a fire extinguisher for the home or an anti-theft device for a car, can lower rates.