How to Best Build Savings – Digital vs Manual

Everyone should have a goal to build savings.

Whether you are saving an emergency fund or a travel fund or for your future, everyone should have a savings goal.

But having a goal is just the first step, the next is to figure out how you are going to build your savings. If you don’t have a plan to save, you probably won’t save.

There are two ways that you can save money – manually or digitally. Each has its own set of pros and cons.

There are tons of different ways to grow your savings.

You can save lots of money with the help of a savings game where you manually save.

Or there are also lots of ways to build savings digitally, such as using an app or website. The most popular digital saving method is using a service like Chime or Personal Capital. But which is best for building savings?

To figure this out, I’ll explain each of the money-saving strategies and then estimate how much it would save in a year.

Of course, the results will be different for everyone, but having an idea of how much can be saved, it might impact how you best like to save. I’ll also use the total amount saved over the course of the year to help determine which method will help YOU build the most savings.

Manual Savings

Manually saving puts all the responsibility of saving on your shoulders. Some people like having control, which is why manually saving works best for them. If you are the type of person who is good at following through on their goals, then manually saving could be a great option for you.

Here are some different savings challenges to help you manually save.

1. 52-Week Savings Challenge

The 52-week challenge has you saving money every week. You save $1 the first week, $2 the second week, $3 the third week and so on until week 52 when you save $52.

This challenge is a great way to ease into saving money.

If you stuck to the 52-Week Savings Challenge, you would save $1,378 in a year.

(note: Qapital is an that will automate this particular savings game if you want to try it but want to make sure you don’t forget a week)

2. 5 Month Savings Game – Played Twice

This game starts with pennies in the first month. On day one you save 1 penny, on day two you save 2 pennies, and so on until the end of the month when you save about 30 pennies. Then the next month you move on to nickels, the third month is dimes, the fourth month quarters, and the fifth month is dollars. You never have to save more than $30 in one day.

After five months you will have saved $655.65. Playing the game twice, in 10 months you will have saved $1,311.30 with two more months left in the year to keep saving.

3. The $5 Bill Savings Plan

The plan is simple, every time you end up with a $5 bill instead of spending it, you save it. How many $5 bills you end up with may vary depending on how often you use cash, but it can really add up. Marie Franklin of LePenzo Dot Com, saved up $36,000 over 12 years using this simple strategy.

Doing a little math and it add ups to an average of $3,000 per year.

4. The $2 Bill Savings Trick

J$ over at Budgets Are Sexy blogged about this one a while ago. Whenever you go to the bank, you buy all of the $2 bills they have, and you stash them away for savings. It works because $2 bills are cool and you won’t want to spend them. (I can personally attest to this truth as I have a handful of them I’ve had since I was a kid). In just a month of doing this J$ managed to save $110.

If you managed to keep up that momentum for a year you’d end up with $1,320 saved.

5. The 12 Month Savings Challenge

Carrie from Careful Cents has been participating in the 12-month savings challenge for a few years. It works by saving $25 each month and adding $25 each month for six months, and then you walk the savings back.

So month one you save $25.

Month 2 you save $50.

Month 6 you would save $150.

Then in Month 7, you’d save $150 again, and in month eight you would save $125 until in month 12 when you save $25.

Carrie and her husband have used this method to save $1,050 each year and use it for their Christmas travel fund.

Digital Savings (Automate Your Savings)

Digitally saving is really just another way of saying automatic savings. It’s trusting technology to do the heavy lifting of saving for you. Automating your savings can make it easier for you to save money because you don’t have to think about it.

There are a ton of different ways you can automate your savings, but here are some of the most popular methods.

6. Spare Change/ Round Up Saving

Both apps and bank accounts exist that will round up your purchases for you and put the spare change towards savings, or investments (acorns), or even debt repayment.

For example, if you spend $3.50 on coffee, the app will round up the purchase to $4 and transfer the $0.50 to savings.

You can typically link the account to your debit or credit card so that all of your purchases are included.

When I set up my Chime bank account, I also signed up for their savings account. Every time I use my Chime debit card, Chime rounds up the purchase and sets the spare change aside into my savings account. They are also doing a 10% bonus on savings at the end of each week. In one week, I’ve saved about $5, with the bonus that is $5.50.

Over the course of the year, just by spending as I normally do, I would save about $286 in spare change.

7. Automatic Transfers or Deposits to Your Savings Account

You can build savings by having an automatic transfer or deposit to your savings account. When I worked full-time, I was able to have part of my paycheck direct deposited into my savings account. I would have $100 deposited to my savings account every time I got paid, which was every two weeks.

Over the course of a year, I was paid 26 times, which meant I saved $2,600.

Now that I’m self employed I tend to automate my savings by expense. For example every month I automatically transfer a set amount to save up for my car insurance bill that I pay semi-annually.

I also have savings accounts set up for my emergency fund and pet emergency fund with automated transfers weekly.

Each separate savings account has a different amount automatically saved. With the car insurance fund I know I’ll be using all of that money when the bill comes due. With my various emergency funds, I use them when needed so the amount in each account fluctuates.

8. Choose the Rules for When You Save

With Qapital, while it does offer a roundup savings option, it also allows rules like saving a certain amount when you hit a step goal on your Fitbit.

You could even set a rule to save when it rains, a literal rainy day fund. It is all goal-oriented. I’ve just started saving and I’ve already saved over $2,000 for taxes and a vacation.

Besides the Fitbit and weather rules, here are some other popular Qapital rules:

• Every time you log into Facebook, save $1
• When you spend on your credit card, save 10%
• Every time you get a direct deposit, save $5

Learn more about how you can save with Qapital from the video below:

If that average holds up for the year, they will have saved $1,680 in a year.

Which Strategy is Best to Build Savings?

Saving money doesn’t have to be difficult. Automating your savings can help make it easier for you. No matter how much you can save, every little bit will help you in the long run.

Here’s a look at the pros and cons of digital and manual savings methods:

Digital Savings:

Pro: Automatically deducts money from your paycheck or bank account, making it easy to save without thinking about it.

Con: You may be charged fees for using this service.

Manual Savings:

Pro: Gives you more control over how much you save and when you save it.

Con: Takes more effort to set up and maintain than a digital savings plan. You’ll also need to have the discipline to stick to your savings plan.

Bottom Line

The bottom line is that there’s no wrong way to reach your savings goals. The key is to find a method that works for you and your family.

All of the manual savings strategies result in saving over $1,000 in a year, but it also requires a lot more effort. You will have to take action to save all year long.

With digital or automated savings, how much you save will depend on which method you use. You likely won’t save as much with just the roundup savings, but if you combine it with another digital savings method you can easily surpass the $1,000 saved in a year. Simply set it up once and you will save as much as you would manually if not more.

Personally, I’m partial to automatic digital savings because otherwise, I’m likely to forget to set the money aside, also I hardly ever go to the bank and rarely use cash. But that is just me.

Whether manual or digital savings strategies will work best to build savings for you will depend on you.

If you use cash regularly or are comfortable setting a reminder to transfer funds regularly, then manual savings will build the most savings for you.

If you prefer saving to be a set it and forget it kind of experience, then digital savings will likely result in the most money saved. Frequent travelers may also prefer digital savings so they can easily access their money when needed without having to go to the bank.

No matter what you need to focus on saving money so you can hit your financial goals. Whether that is paying off credit card debt, saving for a down payment, or a retirement fund, the different ways to save money we’ve shown you in this post can help.

Often, the biggest barrier to saving money is often just getting started.

Pick a savings method and start small if you need to. Automating your savings can help.

Frequently Asked Questions

Do you still have questions about the best way to build savings? We’ve answered the most common questions below.

What is the 30-Day Rule for Saving Money?

The 30-Day Rule is saving the money you would have spent on an impulse buy for 30 days and if you still want it after that, then you can buy it. This period will allow you to save up for the item if you really want it, or decide that you don’t need or want it after all.

What is the best way to build savings?

Try different methods to see what works best for you, additionally, you can:

• Set up a budget and make sure you are sticking to it
• Build multiple streams of income so you can save more money each month

Are there any tricks to building savings?

Start small and increase the amount you are saving each month as you get more comfortable. Then work to create a savings goal to keep you motivated.

How much should I have in savings?

Experts recommend having 3-6 months of living expenses saved so you can cover yourself if you lose your job or something else unexpected comes up like:

• An unexpected medical emergency
• Your car breaks down
• Unexpected home repairs need to be made, etc.

To figure out how much you should have saved, calculate your monthly expenses and multiply it by 3-6.

How can I make my savings last longer?

Ongoing savings strategies will help you make your savings last longer. Try to:

• Save regularly each month
• Avoid dipping into your savings unless it is an absolute emergency
• Invest your money so it can grow over time
• Keep your expenses low so you don’t have to dip into savings as often

Can I save money without a budget?

It is possible to save money without a budget, but it is much harder. A budget allows you to see where your money is going each month so you can make adjustments to ensure you are saving as much as possible.

How do I save on a low income?

There are a few things you can do to save money on a low income:

• Apply for government assistance programs
• Look for ways to increase your income
• Cut your expenses as much as possible
• Save any extra money you have each month

How can I save if I live paycheck to paycheck?

If you are living paycheck to paycheck, it can be difficult to save money. One method you can try is the 50/30/20 rule. This rule allocates your income as follows:

50% goes towards essential expenses like rent, food, and transportation

30% goes towards non-essential but important expenses like entertainment and restaurants

20% goes towards savings

If that isn’t realistic for you (no judgment, the world is crazy expensive these days) another method you can try is the envelope system. With this system, you would put your after-tax income into different envelopes labeled with your expenses. Once the money in an envelope is gone, you can’t spend any more in that category until the next month. This system requires a lot of self-control, but it can be effective. You can learn more about it here [link to envelope budgeting]

What if I can’t save any money?

If you truly cannot save any money, there are a few things you can try:

• Look for ways to increase your income
• Cut your expenses as much as possible
• Create a budget and stick to it
• Look for government assistance programs that can help you in the meantime

What’s the best way to save for retirement?

The best way to save money for retirement is to start early and contribute to a 401k or IRA account. If your employer offers a 401k match, make sure to contribute enough to get the maximum match. For more information on retirement savings, check out this post:

The Basics of Retirement Savings Plans – 401ks!

What’s the best way to save for a house?

The best way to save money for a house is to start early and make small, regular contributions to your savings account. You can also look into government programs that can help you with a down payment on a house. For more information, check out this post:

FAFQ: Can I Afford to Buy a House?

What’s the best way to save for a car?

From using the tried-and-true method of setting aside money each month to save up for a car purchase, to utilizing modern technology and apps that help you automatically save, there are many options available when it comes to saving for a car.

The best way to save for a car ultimately depends on your unique circumstances, but here are a few things to consider when making your decision:

• How much money do you need to save?
• How quickly do you need to save it?
• What is your level of discipline when it comes to saving?
• Are you comfortable with using technology to help you save?

What’s the best way to save for college?

The answer may surprise you – it’s not necessarily one method over the other. Instead, it depends on your unique circumstances.

For example, if you have a lot of expenses and not much income, you’ll want to focus on automating your savings. This could involve setting up a direct deposit from your paycheck into a savings account or investing in a 529 plan that can grow over time. The sooner you start the more you’re likely to earn and the more your money will grow.

On the other hand, if you have a decent income and are able to save consistently, you may want to consider manual savings methods. This could involve setting aside a certain amount of money each month into a savings account to earn interest (though interest rates these days are pretty low) over time or investing in a mutual funds and letting your money grow.

The bottom line is that there’s no one-size-fits-all answer when it comes to saving for college. It ultimately depends on your individual circumstances.

What’s the best way to save for a rainy day?

The best way to save money for a rainy day is to have an emergency fund. This is a fund that you set aside specifically for unexpected expenses. It’s a good idea to have at least 3-6 months of living expenses saved in your emergency fund so that you’re prepared for anything that comes up. But don’t let that number intimidate you, everyone starts at zero.

To start building your emergency fund, you can set up a direct deposit from your paycheck into a savings account or invest in a short-term bond fund. The important thing is to get started and start building that cushion of cash.

What is the best way to save money fast?

If you need to save money fast, there are a few things you can do. First, take a look at your budget and see where you can cut back on expenses. This could involve eliminating unnecessary costs like cable TV or eating out (maybe just temporarily).

Second, you can boost your income by picking up a side hustle or getting a part-time job to make more money.

And finally, make sure you’re taking full advantage of all the financial tools at your disposal. Do you have a cash-back credit card you could be using – every bit of extra cash can help. So take advantage of any free money you can get your hands on.

Or maybe you just need to tweak some of your spending habits. Whatever the case may be, there are always ways to save money fast if you’re willing to put in the work.

What is the best way to save long-term?

If you’re looking to save money long-term, there are a few things you can do. One option is to invest in a 401k or IRA. This will allow you to save for retirement while also getting income tax breaks.

Saving money can be a challenge, but it’s important to start somewhere. By following these money-saving tips, you can begin building your savings so that you’re prepared for anything life throws your way.