5 ways to fill up your savings account while you're stuck at home
Oliver Rossi/Getty Images
- If you're spending less money while you practice social distancing, you'll likely have more in your bank account as you cut back on transportation, nights out, vacation, self-maintenance, and childcare.
- This is assuming your income is steady and you don't need the money for immediate expenses.
- Rather than keeping this extra money in a checking account, you can move it into savings.
- One option for that money is a high-yield savings account, so it earns interest while staying liquid and accessible.
- See Business Insider's picks for the best high-yield savings accounts »
As the US takes precautions against the coronavirus, employers are making working from home mandatory, and the government is recommending people self-isolate. Some cities are even requiring residents to stay home, except in extreme circumstances.It hasn't been an easy time for anyone.Advertisement
There is one silver lining to spending your days inside, though: You're probably spending less money. Rather than let that money sit idly in your checking account, you can find ways to make your money work for you.
If your income is stable and you don't need the money for immediate expenses, you could invest the extra money in your 401(k). You could open a CD. Or you could move it into a high-yield savings account, which earns more interest than an average savings account.High-yield savings accounts are the perfect places to save for large upcoming purchases, such as buying a home or going on vacation. They're also solid tools for beefing up your emergency fund.
While no one knows how long the coronavirus pandemic will last, the US is entering a recession. Contributing extra money to your emergency savings account in preparation could be a smart move.Here are five expenses that you might have paused while you self-isolate. Putting this money into savings could give you a leg up in the future.
1. Money used for transportationHow often do you normally fill up your gas tank? Once per week? You'll probably be stopping at the gas station a lot less frequently in upcoming weeks as you stop commuting to work and visiting friends' houses.Advertisement
You also won't have to pay for parking for a while. This could be a game changer for people who live in big cities with monstrous parking fees.
If you take public transportation, you might stop spending money on metro passes and bus fares. Some workers may be enrolled in pre-tax commuter benefits through their employer. If you're working from home right now, ask your boss whether you can temporarily pause those benefits.
2. 'Going out' moneyMoney spent on meals during your lunch break, dinner dates, happy hour drinks, and mid-morning coffees adds up. Now that you're trying out a few of Grandma's old recipes rather than eating at restaurants, you're bound to save some money.Advertisement
According to your bank statements, how much do you usually spend on going out? Read through your last few bank statements and make a note of all the charges related to grabbing food or drinks outside of the house. At the end of the week, consider moving that amount into a savings account.
How much were you planning to spend on shows, concerts, and festivals that have been canceled? You can move that money into account to save even more for next year's spring festivals.However, note that we're not recommending stopping your spending completely. You might want to keep supporting local companies that are struggling to stay in business during this time. If you don't want to cook, order takeout from a nearby restaurant. Buy a t-shirt online from the band whose concert you wanted to attend next month. Chances are, you'll still be saving money compared to your usual social schedule.Advertisement
3. Cash set aside for vacationTravel has been restricted worldwide. The cash you have set aside for that trip to Disney World or Italy will likely sit in your bank account for a while longer.
You might want to hold onto it so you can take this trip at a later date, but there's no reason to keep it in a checking account. Instead, you can move it to a high-yield savings account so that when you do finally go on vacation, you have money for a few extra Dole Whips or cups of gelato.Considering scrapping this trip idea all together? You can move the money to your emergency fund or another savings account to work toward another financial goal.Advertisement
4. Self-maintenance and service costs
Those semi-monthly mani/pedis might be taking a backseat while the government recommends limiting contact with others. You also may need to cancel your weekly massage appointment or next Thursday's haircut appointment. Maybe you don't need a dog walker or housekeeper right now, and your gym is pausing your payments while it's closed.Eliminating these expenses - and refraining from making new appointments or signing up for new memberships - can free up money for your savings. But there's one thing to keep in mind: When you cancel regular appointments, consider still paying the people who would normally perform the service.Advertisement
Many independent contractors and hourly employees are losing work while people self-isolate. If you have to cancel on a service provider who usually visits your home, consider continuing to pay them if it's financially feasible.
5. Money toward childcare
Again, if you usually employ an individual to look after your kids, ideally you'd keep paying them.But maybe your child attends a daycare that allows you to pause payments during the pandemic. In this case, the money you save on childcare can go into savings to prepare for whatever the future holds.Advertisement
- More savings and retirement coverage
- How to retire early
- The best high-yield savings accounts right now
- The banks with the best CD rates
- When to save money in high-yield savings
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
- Odisha's COVID-19 tally crosses 9,000-mark, death toll rises to 36
- Delhi gets 10,000-bed COVID care centre; LG says it will play crucial role in fight against pandemic
- Rural markets faring better than urban centres amid coronavirus pandemic: Maruti Suzuki
- COVID-19: Six fresh fatalities in Rajasthan
- Puducherry coronavirus tally shoots up to 946 with 43 new cases