The numbers are concerning: more than half of Americans feel uneasy about their emergency savings, as per a Bankrate survey this year. Additionally, only 44% believe they can afford an unexpected $1000 expense using their savings.

If you possess a savings account, particularly an emergency fund that covers three to six months of expenses, give yourself credit—having savings is vital for your financial well-being. However, simply having cash in your account isn’t always enough. By actively managing your savings, you can achieve your financial objectives more efficiently.

Choose a High Yield Savings Account

I can’t stress this enough—consider opening a High Yield Savings Account (HYSA). These accounts are popular for a good reason; they offer a higher Annual Percentage Yield (APY) than standard savings accounts. Many banks provide HYSAs without fees, and you can often start with a minimal initial deposit.

You can even earn interest on the interest you accumulate (known as “compound interest” in finance). This is a fantastic bonus for your emergency fund!

Opening a HYSA is straightforward, with many online banks providing fast approvals. There are numerous options for HYSAs, and if you’re unsure where to begin, check out my top recommendations.

Utilize Automation Features

Save effortlessly using automated services, like roundup savings. Many banks offer this feature, which works by rounding your purchases up to the nearest dollar and automatically depositing the difference into your savings account. For instance, if you spend $12.49 on lunch, the transaction will round to $13.00, and $0.51 will be moved into your savings. While it may seem minor, this can accumulate significantly over time.

As an additional tip, think about designating a percentage (or a fixed amount) of your paycheck to automatically transfer into your savings. This way, you eliminate the hassle of remembering to make manual deposits.

Consider a Health Savings Account (if you qualify)

Health Savings Accounts (HSAs) are an excellent way to save for medical expenses thanks to their tax advantages. HSAs are funded with pre-tax dollars, and withdrawals for qualified medical expenses are also tax-free.

However, there are qualifications to meet before you can open an HSA. To qualify:1. You must be covered under a high-deductible health plan (HDHP)2. Cannot be covered by another health plan3. Cannot be enrolled in Medicare4. Cannot be claimed as a dependent by anyone else. If you meet these requirements, an HSA can be a great way to save for healthcare costs while reducing your tax liability. HSAs can be funded up to the annual limit set by the IRS, which for 2025 is $4,300 for single plans and $8,550 for family plans.

Prioritize Your Savings

Building good savings habits and defining your savings goals is essential for healthy finances. Whether you’re aiming to establish an emergency fund or save for a dream vacation, there are numerous strategies to enhance your savings. For more financial tips, join me on Instagram, where I frequently share advice on optimizing your savings.