How to Save Money (8 Proven Ways)

What’s the difference between using a chequing and a savings account?

The primary difference between a chequing and savings account is how each account is used. Your chequing account is your hub for managing your day-to-day spending and deposits. Cheques and your debit card are connected to it and it’s where you can deposit your pay cheque and pay your bills.

Savings accounts are designed to help you save for the future. You earn interest on the money you save and there are typically more restrictions on purchases, transfers and withdrawals.

How to use a savings account to save money

Many advantages come along with a savings account, but you might think “How should I use a high-yield savings account to get the most out of it?”

• Create a savings goal. Get specific! For example, you can set a savings goal of $3,000 for a vacation or save $10,000 to act as an emergency fund.
• Open a high-interest savings account. Look for an account with lower service fees and high rates so you can make the most out of your savings.
• Make an initial deposit into the high-interest savings account. Deposit any amount to kickstart your savings and earn higher returns to reach your financial goals faster.
• Set up automatic transfers from your chequing account. Simplify your savings so you don’t even have to think about it. Create recurring transfers for monthly bills and expenses and never miss a payment.
• Deposit additional funds if you receive a windfall. If you want to learn how to save money fast, commit to putting your windfalls in your savings account. Got extra cash from a birthday, a tax refund, or an inheritance? Let it earn more interest in your savings account so you can reach your goals faster.

How to earn interest on savings accounts

If you want to figure out how to earn interest on savings accounts, it’s all about being consistent. After opening a high-interest savings account, regularly depositing money will help your balance grow.

The easiest way is to set up automatic transfers. The more money you save, the more you’ll earn in interest. Savings accounts are the perfect vehicle for helping you reach your personal and financial goals.

8 proven ways to save money

Figuring out how to budget and save money in today’s environment can be challenging. Rising costs mean your money isn’t going as far as it used to. But with these eight strategies, you can learn how to save money fast and see your balance climb, all the while earning more interest on the money you save.

1. Track your personal spending

When it comes to how to budget and save money, you need to track your personal spending. Reviewing your transactions not only offers insight into where your cash is going but also where you might be able to cut back. BMO Insights, a feature on the BMO mobile App, can give you a snapshot of your spending.

2. Cancel unnecessary subscriptions

An easy way to free up some cash is to cancel unnecessary subscriptions. If you have streaming or magazine subscriptions that you no longer use or value, consider cancelling them. Take those funds and put them straight into your savings account.

3. Open a high-interest savings account

You don’t have to figure out how to save money by yourself. Open a high-interest savings account. It’ll act as your savings sidekick, maximizing the interest you earn on the money you put away.

4. Use the right tools to determine your savings goals

Reaching your savings goals requires a strategy. Use a savings calculator to see how much you need to put away each month and visualize how your savings can grow over time.

5. Bundle services as much as possible

Cut costs by bundling different services and plans. The BMO Family Bundle makes saving for families more affordable.

6. Pay off your high-interest debts

Wondering how to save money fast and easily? Pay off any high-interest debt. That way you can earn more interest in savings rather than pay more interest. Once it’s paid off, you will free up that monthly payment, which can then go toward your savings. 

7. Automate bill payments

Make bill payments automatic and easy, so you never pay late fees and can have a predictable schedule. Set up automatic payments for monthly expenses like your cellphone bill, your rent, and any dues or subscriptions.

8. Skip the coffee shop and cook at home

Wondering how to save money on groceries and going out? Ditch the java fix at your local coffee shop and make your own brew at home. Commit to learning how to cook and make your favorite dishes.

Supercharge your savings

Learning how to budget and save money is a process. Making little changes with these eight tips can help reduce expenses and boost your savings. One of the most important things is to set a goal and use the right tools to help you get there. By using BMO’s savings calculator and a high-interest savings account, you can get support and supercharge your savings.

How to Save Money FAQs

Here are some frequently asked questions on how to save money.

What is the 50/30/20 rule?

The 50/30/20 rule is a tool to help you budget using specific benchmarks. The 50/30/20 rule suggests that your needs should be 50% of your income, your wants should be 30%, with 20% going toward savings.

What is the 30-day savings rule?

The 30-day savings rule is a way to reduce impulse purchases by waiting 30 days to hit the buy button. So next time you feel like buying something on a whim, wait 30 days to see how you feel about it.

How can I save $1,000 fast?

Learning how to save money fast and get $1,000 takes some commitment and strategy. Reduce costs by foregoing dining out, buying coffee, and eliminating subscriptions. Check for discounts on groceries and consider a side hustle to reach your savings goal.