Could You Weather a Financial Emergency? 6 Ways to Save $2,000 This Year
Life hits. It’s an emergency. You need $2,000.
Can you tap into your savings?
Emergency funds, also known as rainy day funds, are essential. You never know when you’ll face an unexpected medical procedure, hefty car repairs or a vet bill.
When it comes down to it, only 15% of Americans could come up with that $2,000 right now, according to a Penny Hoarder analysis of Federal Reserve survey data.
This, my friends, will get you into trouble.
But don’t worry. Although $2,000 might seem like a hefty chunk of money, we’ve brainstormed some hands-off strategies to help you beef up your savings within a year.
6 Ways to Save $2,000 This Year
Here are a few strategies that’ll help you tuck away $2,000 by this time next year.
1. Open a Second Bank Account (and Stop Paying Bank Fees)
If you have a budget, build your savings into it, and treat it like any other bill: $167 a month.
We suggest hiding this money in a separate hands-off account. You’ll find a number of savings accounts on this list, but you can also keep your money in a checking account — and still earn interest.
Radius Bank does more than your average bank to make you feel appreciated. The full-service virtual bank offers perks that traditional banks don’t, including up to 17 times the national average interest rate with the Radius Hybrid checking account.
Radius Hybrid is a free checking account that combines the interest-earning potential of a savings account with the flexibility of a checking account. You’ll earn 1% APY on balances over $2,500 (1.2% on balances above $100,000).
You’ll also enjoy freedom from fees: There are no monthly fees or minimum balance requirements, and you can be reimbursed for fees from any ATM in the world (yup).
Ready for someone to go above and beyond for you? You can open an account with just $100 — in as little as five minutes.
2. Consolidate Your Debt and Pocket the Extra Cash
A lot of us are being crushed by credit card interest rates north of 20%. If you’re in that boat, consolidation and refinancing might be worth a look.
A good resource is consumer financial technology platform Fiona, which can help match you with the right personal loan to meet your needs.
Fiona searches the top online lenders to match you with a personalized loan offer in less than 60 seconds. Its platform can help you borrow up to $100,000 (no collateral needed) with fixed rates starting at 4.99% and terms from 24 to 84 months.
3. Start Investing With $50 (and Get a Free $50)
It’s difficult to guarantee you’ll save $2,000 in a year by investing, but if you’re struggling to save a fixed amount of money each day, week, month or paycheck, then this will get you going in the right direction.
If you’re looking to get started, explore the world of impact investing. Take Swell Investing, an SEC-registered investment adviser committed to supporting sustainable companies.
Its Impact 400 portfolio features companies whose products and services align with the United Nations Sustainable Development Goals. It considers everything from gender equality to ending poverty to clean energy.
You can start with just $50 and invest in this or other portfolios committed to clean water, zero waste, renewable energy or disease eradication, to name a few. Plus, you’ll get a $50 bonus with the code PENNY after making your initial investment.
Swell doesn’t have any trading fees, price tiers or expense ratios. It charges a 0.75% annual fee — that’s about the cost of one coffee ($3.75) per year if you invest $500.
Disclosure: We have a financial relationship with Swell Investing LLC and will be compensated if consumers apply for an account and/or fund an account with Swell through links in our content. However, the analysis and opinions expressed here are our own.
4. Let an App Determine How Much You Can Afford to Save
If saving more than $50 at a time sounds unrealistic, here’s a simple solution: Recruit a savings app to help you determine how much you can comfortably afford to tuck away.
Digit is one app option. Its algorithms analyze your income and spending habits and automatically withdraw small (and safe) amounts of money to stash in a separate FDIC-insured savings account.
Because you have a specific goal in mind — $2,000 in a year’s time — let Digit know by adding a “personal goal.” Digit will do what it can to help you hit that goal (without causing you to overdraft).
Although Digit costs $2.99 a month after a free 30 days, you’ll earn a $5 bonus when you sign up, as well as 1% balance bonus every three months.
5. Approve $5.50 Daily Saves
If automating your savings makes you feel uneasy but you also don’t trust yourself to consistently save, find a happy medium.
Let me explain… A free iPhone app, Joy, offers advice but ultimately gives you the final say.
Its free savings-account feature identifies exactly how much you can afford to put away each day. But before automatically sliding that money out of your account, it’ll ask for your approval.
You can approve saves as little as $5.50 each day and still hit your goal of $2,000 this year.
6. Play Games, and Save $39 a Week
You’re right: It’s more fun to spend. But how about turning saving money into a game? Then it’ll get a little more exciting.
The folks who created Long Game have you covered with a game that’s fun and helps you achieve your financial goals.
As you save and accomplish missions you’ll earn coins to play mini games for cash prizes! We’re talking the classics, like slot machines, scratch-offs and spin-to-win wheels.
I use Long Game to save money. Every two weeks, it sneaks $5 out of my bank account and rewards me with coins.
In two months, I saved $35.70, just by playing games on my phone. Plus, my winnings amount to a gain of about 2% — way higher than interest on any other savings account I have.
Once you link your bank account, you’ll earn 300 coins, so you can start playing while you wait for payday.
At $39 a week, you’re guaranteed to accumulate $2,000 this year — and you’ve got a chance to hit the jackpot if you save it through Long Game.
If That $2,000 in Savings Still Feels Too Far Away…
If putting away $2,000 this year still feels out of reach, that’s OK.
Give yourself more time. Maybe you need two years. Don’t overwhelm yourself. Be realistic, or you risk falling into that doom-and-gloom mindset.
You can continue to work to cut your expenses. For example, download TrueBill, an app that’ll negotiate your bills, cancel unwanted subscriptions and refund your bank fees. On average, Truebill says it helps customers save more than $700 a year by lowering their bills, canceling necessary subscriptions and getting refunds.
If you need, you can also give your income a little boost with a flexible side gig. For that, we compiled a list of 50 ways to help you make extra money.
Carson Kohler ([email protected]) is a staff writer at The Penny Hoarder. She favors the what-you-don’t-see-you-don’t-miss mentality and directly deposits a percentage of each paycheck into a hands-off savings account.