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Incorporating Savings Into Your Budget

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Evidence suggests that financial troubles will be a major issue for many households in the near future. The American personal saving rate is again on the decline after peaking in 2008, standing most recently at just 3.6 percent. To further highlight a looming problem, fewer families report having saved in the past year, and median net worth (adjusted for inflation) has declined since 2007, according to the Federal Reserve's Survey of Consumer Finances.

How can we as consumers turn things around? Creating a budget is, often heralded as the first step down a road of financial responsibility, and rightfully so. A good budget will outline your predictable expenses -- those faced on a monthly basis like rent, food, utilities, etc. -- and help to keep spending in check. Unfortunately, what sometimes proves more difficult is building up savings for unexpected costs and retirement purposes.

Here are three savings programs offered by many banks and credit unions that could help you save more effectively, without requiring a major overhaul of your regular financial habits.

1. Automate, automate, automate

Possibly the easiest way to save money is to remove yourself from the process altogether. Do you already receive a regular paycheck via direct deposit? Your employer may offer the ability to divert a portion of each paycheck into different bank accounts, much like you would for a 401(k) plan. Instead of allowing 100 percent of your pay to flow through your checking account, designate a small percentage for interest-bearing savings. You'll be less likely to "forget" to set some aside, especially if the savings account is with a separate bank.

If you can't get paychecks directly deposited, it's very likely that your bank or credit union offers a similar alternative, through recurring automatic transfers to a savings account. Set one up for a day or two after your paycheck usually arrives. It can help you remain faithful to the savings plan without the hassle (and sometimes heartache) of setting aside heard-earned pay each month.

Signing up for automatic savings can also help save on fees. For example, Wells Fargo's Way2Save Package waives the savings account monthly fee with automatic transfers of either $25 monthly or $1 daily.

2. Get rewarded for regular banking activity

Rewards checking accounts, most commonly found at smaller community banks and credit unions, are great options to quickly build up a savings balance through every day transactions. The accounts are typically free (meaning no monthly fees or minimum balances), but also offer very attractive yields and ATM fee waivers with a few basic requirements. Do you direct deposit a paycheck? Get your bank statements online? Use your debit card to make purchases? If so, then a rewards checking account can really pay off. One example that anyone can open is the Rewards Checking account at Bank of Internet USA. Customers can earn up to 1.25 percent APY, depending on which monthly requirements they meet. At such rates, many rewards checking accounts are earning more than even the best high yield savings accounts at online banks.

The catch with a rewards account is that the high interest rate usually applies to a limited balance, which could be as low as $500 or as high as $50,000 or more. Make sure to verify this before choosing an account or else the "rewards" won't amount to much. The other concern with using rewards accounts to boost savings is that they by nature require spending money to earn money. If 10 or more card purchases per month is routine, then it will be easy to meet the requirements. Those who don't make as many purchases may find themselves needlessly spending just to earn a bit more interest -- certainly not worth the account's benefits.

3. "Round-Up" your purchases

The old adage, 'every penny counts,' is definitely not obsolete, and round-up savings programs prove it. The premise is simple: The bank rounds up each purchase to the nearest dollar and puts the difference into your savings account. For example, with Bank of America's Keep the Change Savings Program, every debit card purchase is rounded up to the nearest dollar and the difference is automatically transferred to your savings account.

Whereas cash purchases often lead to loose change tossed in a tip jar or lost on the street, round-up savings programs linked to a debit card allow consumers to salvage value out of each penny unspent. Remember that when it comes to budgeting your savings, it's best to start by thinking small. You don't have to throw a lump sum $500 into your account every month if it hinders you from fulfilling other financial obligations. You may be better off saving small amounts but through more frequent and routine transactions.