There are many reasons to save money. It’s not just because some wise philosopher said, “Take care of the pennies and the dollars will take care of themselves”. It’s also not just because your parents advised you to “save for a rainy day” although they are both right. Those lessons on how to put money aside each month will soon pay off.

Why Set Aside Money?
You’ve probably heard about a rainy day fund or an emergency fund. It is important to have money set aside for emergencies like losing your job or a huge car repair bill to protect yourself from potential financial ruin.
Potential negative scenarios are not fun to think about, but they are necessary to plan for. Injuries, accidents, and illnesses occur. A savings fund should cover your living expenses for a few months until you can get back on your feet.
In tough economic times, having savings allows you to “weather” financial unrest.
Retirement is another good reason for building a nest egg. You don’t want to find yourself at seventy, too old to work but too broke to be able to enjoy retirement. Sixty-four percent of Americans don’t plan for retirement and the average American can’t save enough to retire comfortably.
What Gets in the Way of Saving?
An adage states, “If you fail to plan then you plan to fail.” The number one impediment to saving is not creating a budget.
The next problem is not sticking to your budget. When you aren’t maintaining your budget, people find themselves robbing from their savings account to meet emergencies or to pay monthly expenses.
Overspending on nonessential items is another problem we can all struggle with.
Let’s face it – sticking to a well-prepared budget is hard work. It takes the fun out of spontaneous purchases. However, disciplined saving brings peace of mind and long-term happiness.
Budgeting Tips
People who often run out of money before the next paycheck may have an inaccurate or poorly thought out budget or they may have no budget at all.
To ensure you stay within your means, create a careful and accurate list of all your expenses.
Start with the essentials (rent, food, medical, etc.) Set aside the total amount each month to cover these essential costs.
Next, take the remaining amount and divide it amongst your non-essential categories (entertainment, luxuries, vacation, etc.) Now you see where your funds are being allocated. Do not exceed it.
Do not overspend.
Those little luxuries like morning coffee, wine, or dining out can mount up. Paying for them in cash will help avoid overspending. When the cash reserve is gone, buying your luxuries are too.
Create safeguards to keep you from robbing your savings. Actions like cutting up your credit cards could help deviate overspending. Ask your bank about safety measures to stop overspending.
Savings Tips
Subdivide your savings into categories like Christmas gifts, retirement fund, kids’ education, family vacation, and entertainment. Every dollar you put into savings should have a label. This makes it harder to borrow from it.
Set aside an emergency fund that is separate from savings and household expenses. When your fund has roughly three to six months to cover your essential expenses, then you don’t need to keep feeding it.
Set a reasonable saving goal. Do the math. If you make $5,000 a month, and your living expenses are $3,000, you can’t possibly expect to set aside $2,500 in savings. It just isn’t there. Decide what is reasonable and proceed. Be consistent.
To ensure you stay consistent, try using an app to keep track of your expenses. An app like Marygold & Co. helps support and track your goals and funding options all within one place. With Marygold & Co., you can create custom Money Pool Savings Accounts to oversee the different accounts. These Money Pools help organize your finances all in one place while displaying your progress towards each prioritized goal.
No matter how long or short a time you have been earning, initiate and continue a savings plan. Your targets may change but there will always be reasons to save.
The Percentage Method of Saving
Instead of thinking of savings as dollar amounts, save a percentage of your net income each month by using the 50/30/20 rule.
Senator Elizabeth Warren reportedly referred to this method when she was teaching bankruptcy law and popularized it in her book. The rule is to divide up after-tax income then allocate the amount to spend by reserving 50% on needs like rent and food, 30% on wants like entertainment or luxuries, and 20% towards savings. Thus, you should aim to save 20% of your after-tax paycheck each month. You may have to adjust this percent, but use the 50/30/20 rule as a guideline.
The Easiest Ways to Ensure Savings
- Record every expense—no matter how large or small. Organize data into categories: gas, groceries, insurance, entertainment, and mortgage. Consider using a tracker app from your financial institution.
- Allocate 10 to 20 percent of your income into savings and investment accounts. Set clear prioritized goals with timeframes and target amounts.
- Look for ways to cut expenses.
- Find free or lower cost events in your community as alternative entertainment, to reduce entertainment spending.
- Cancel subscriptions and memberships if you are not making good use of them. This includes things like Netflix, Crave, and Prime.
- Make the event of eating out a special event and place it under your entertainment category. Eat and cook at home when you can. You will eat healthier and cheaper.
- If you think you need something, step back and think about it for a week. Your perspective on nonessential purchases may change.
- Think about fixing up rather than trading in.
- Set clear achievable goals. Give yourself confidence in your saving ability by setting a fun goal for you or your family. The achievement will reinforce your saving habit.
- Learn to set priorities with items for which you’re saving. For example, if your roof is going to need repairs, your car is getting old, or your washer is on its last leg, you know you need to start saving for those imminent costs.
With a mobile banking services app like Marygold & Co., you can arrange for an automatic deposit from each paycheck of a set amount into each “Money Pool” savings account you set up to give you direct control over how you reach each goal.

Money Pool Savings Accounts
Money Pool savings accounts help you organize your finances, establish goals, and set priorities.
How does it work? Money Pools align with your short-term and long-term savings goals. This is an organized and easy way to create and follow individual savings goals. Establishing these individual goals gives you direct control over how you reach those goals. The Money Pools define the target and the timeline of each specific goal. You can instantly track your progress each time you log in and prioritize your financial goals.
The returns on your Money Pools coincide with when the money is required to meet those established goals.