Focus on the 'timing of when you spend your money' if you want to save more, says expert

Kathy Kraninger, director of the Consumer Financial Protection Bureau.
Andrew Harrer | Bloomberg | Getty Images

Kathy Kraninger, director of the Consumer Financial Protection Bureau, will plan her day around a visit to her bank, just so she doesn't have to pay fees to withdraw cash from another bank's ATM.

Just how much does that type of planning save? A 2018 study by Bankrate found that withdrawing cash from an out-of-network ATM results in total fees of $4.68, both from your bank and the one that owns the ATM. That may not seem like much, but small fees can really add up over time, which is why it's important to be vigilant, says Kraninger.

The CFPB launched the "Start Small, Save Up" initiative earlier this year to provide tips, tools, and resources aimed at helping consumers develop a saving habit and build up a savings cushion.

Being mindful about how and when you spend your money can help you save, Kraninger says: "There are a lot of things that we pay that we don't think about," and they can make a real difference to your bottom line.

'Figure out where your tightest time is'

Nearly half of Americans live paycheck to paycheck, according to a recent survey conducted by GoBankingRates. Whether or not that's not the case for you, it helps to understand your cash flow — when money comes in and when major bills are due — to avoid other costly fees like overdraft charges, Kraninger says. Bankrate found that the average overdraft fee in 2018 was $33.23.

Creating a budget can help. You can also try reverse budgeting by setting aside money for the essentials first.

"Figure out where your tightest time is, and try to mitigate that by managing your spending at certain times of the month when you have the ability to do it," she says. "Timing of when you spend your money is an important consideration."

There are a lot of things that we pay that we don't think about.
Kathy Kraninger
director of the CFPB

'The difference between a need and a want'

When analyzing your cash flow, it's important to find ways to improve your savings rate and develop a long-term habit of paying yourself first, Kraninger says. That also means scrutinizing whether some spending is actually necessary — advice that she says "is certainly not popular."

Identifying "the difference between a need and a want" can help, Kraninger says, although which expenses fall in each category may look a little different for everyone. And asking yourself this question is an important step to incorporate in your monthly budgeting, she adds.

'Don't buy anything with a credit card that you actually can't afford'

While you're looking at your spending, consider how you're paying for those purchases. Using credit cards is an important way to build credit, and it can help save you money. But credit cards can also encourage impulse spending, which is why some personal finance experts recommend paying with cash.

Kraninger learned early on to use credit cards responsibly. "My parents taught me: Don't buy anything with a credit card that you actually can't afford," she recalls.

As you try to master your cash flow each month and increase the amount you're saving, it may be best to use your credit card only when you really need to, Kraninger says: "It's definitely not the best credit product to be relying on on a regular basis."

More from Grow:

acorns+cnbcacorns cnbc

Join Acorns


About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2021 Acorns and/or its affiliates.

NBCUniversal and Comcast Ventures are investors in Acorns Grow Incorporated.