If you want to save more money in 2024, it can help to get inspiration from personal finance experts. We picked a few helpful quotes from well-respected financial experts that are designed to help you save money and make better investments.
Whether you're trying to decide where to put some extra cash at the end of the month, or trying to find a better way to invest for retirement, we can all benefit from some expert advice from time to time. This money advice will hopefully be useful for a wide range of people, no matter how much cash you have in the bank.
Let's look at three expert quotes on where to put your savings in 2024.
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1. Build your emergency savings
"The lack of emergency savings has become a billion dollar problem for employers and a serious problem for employees." -- Suze Orman, Co-Founder, SecureSave
The past few years of high inflation have caused many Americans to deplete their savings accounts, and sadly, many Americans never had much money in the bank in the first place. A recent report from SecureSave found that 63% of American employees wouldn't be able to cover a $500 emergency expense. Another study from The Ascent found that the typical American's savings account has a balance of $1,200 -- but 41% of Americans have less than $500 of savings.
It can be hard to save money when life seems to keep getting more expensive with each passing month. Many people are struggling to pay for the rising costs of car insurance, healthcare, groceries, and housing. But ideally, if you earn a good enough income to not be living paycheck to paycheck, you need to try to set aside some cash into an emergency fund.
Most personal finance experts recommend you have three to six months of expenses in your emergency savings fund. Use a high-yield savings account to hold this cash; that way you have immediate access to your money (with no early withdrawal penalties like a CD). If you lose your job, suffer a big expense like a natural disaster, major medical bill, or serious car crash, or otherwise have extra costs or an interruption in income, you need to have some cash in the bank.
If you need to set a top-priority savings goal for 2024, you might want to replenish your emergency savings first. Building your emergency savings can improve your financial wellness and make you more resilient in case of a crisis.
2. Make saving money automatic
"Automating your money will be the single most profitable system you ever build." -- Ramit Sethi, personal finance author, host of How to Get Rich on Netflix
Saving money can be hard. Not everyone enjoys the process of budgeting and saving; some people feel overwhelmed, stressed, or paralyzed by it. You might be asking yourself:
- How much can I really afford to save?
- When should I save -- at the start of the month or the end of the month?
- Should I try to save a certain percentage or dollar amount of each paycheck?
- What if I want to save for multiple goals at once?
- How much is "too much" to save -- will I overdraw my checking account or run out of cash to pay bills?
Don't overthink it. Instead of agonizing over all these complex decisions, you can automate your money and make saving automatic. There are several banks and personal finance apps that will help you do this. Some even analyze your spending patterns and move money to savings automatically, in dollar amounts so small you probably won't even notice -- but that adds up to serious money.
Here are a few banks and personal finance apps that offer automatic savings:
- Ally Bank
- SoFi Bank
- Albert App
- Oportun (formerly Digit)
3. Instead of picking stocks, buy all the stocks
"The trick is not to pick the right company, the trick is to essentially buy all the big companies through the S&P 500 and to do it consistently and to do it in a very, very low cost way." -- Warren Buffett, legendary investor and CEO of Berkshire Hathaway
When people first get started with buying stocks and learning how to invest, sometimes they get excited about picking stocks and trying to beat the market. Indeed, some investors (like Warren Buffett, or like the Motley Fool's Stock Advisor service) have a long-term track record of outperforming the S&P 500 index. But most people are not that good at picking stocks. Most day traders lose money.
Instead of trying to pick individual stocks, when saving for retirement, you are likely going to be better off buying a diversified portfolio of low-cost index funds. Don't pick a few stocks, buy lots of stocks -- and let the world's most successful companies make money for you. Owning the entire stock market is likely to give you a better long-term return on investment than choosing a few stocks.
Bottom line
Want to know where to put your savings in 2024? Start with your emergency savings fund. If you need more cash in the bank, put your savings on autopilot with automatic transfers and helpful apps like Oportun, Albert App, or innovative tools from Ally or SoFi. And once you have some cash to invest for the future, consider putting it into the stock market -- not by picking individual stocks, but by buying low-cost, diversified index funds and ETFs. These ideas will hopefully help a wide range of people improve their personal finances.
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