When asked what they'd do if unexpectedly required to come up with $1,000, the vast majority of Americans say they would look to means outside of their own savings, according to an August 2011 survey by the National Foundation for Credit Counseling. Indeed, only 36% said they would draw money out of their savings account to cover an unplanned expense of $1,000. This means that a staggering 54% of us do not have sufficient savings to cope with a $1,000 bill.

SEE: 5 Ways To Trick Yourself Into Saving Money

It's not rocket science – we all know that having a savings account ensures you are set for these unforeseen circumstances. It is true that times are tough, and interest rates on savings accounts are at an all-time low, but you can still make saving pay.

Anything you can put aside will make you more secure in the coming months and year – keep in mind that saving just $10 a week is $520 by the end of a year.

And always remember the value of compounding. At the moment, interest rates are unusually low – which means that savers aren't getting much of a return on their money. But that will certainly change in time, and when it does your savings will suddenly benefit from the wonder of compounding. Put $1,000 in an account paying 2% for five years and you'll have $1,104.08 in the end. But if the interest rises up to 5%, you'll have $1,276.28. After 10 years you'll have $1,629 if the 5% interest remains. (For more, check out It's Never Too Early To Start Saving.)

So how can you make a start as a saver today? Here are our top ways to start that saving account, that are easy to implement and won't be too painful to your lifestyle.

The first thing to do is open the best savings account you can. Bestcashcow.com offers a comparison of the best rates on savings accounts. You can also compare accounts in your state. Check this out to ensure that whatever savings you do have are making you the best possible return.

The problem with saving is that you can 'miss' your money – but you can't miss what you haven't had, right? Complete a budget of what you absolutely need to live off of – bills, food expenses, etc. Then, as soon as your paycheck arrives, sweep the rest off into a savings account. If this money is never in your account, you won't feel you're losing out. Of course, this step requires accurate budgeting to work out what you need on a month-to-month basis. So, go through your previous bank statements so you'll have an accurate picture.

Pocket Change
At the end of each day, or each week, empty your change into a jar. Go through your pockets and bag - because those quarters really will add up, and even if you just accumulate $2 a day, that's $730 by the end of a year. If you pay this change into the bank each month, then you'll have the interest to add on top of this. Keep remembering that every dollar counts and you won't go wrong.

Curb Spending
If you're prone to impulse buys and money tends to burn a hole in your pocket, it might be helpful for you to work out what your post-tax wage is per hour. Once you know this figure, you should look at everything you intend to buy with this in mind. If you're considering a $50 pair of shoes and this is five hours of your pay, you might start to think they're not quite worth it after all. This is a great technique to stop spending – and what can you do with this money you save? Invest it in savings of course!

Look for Deals
Now, nobody is suggesting that you stop spending money altogether, but perhaps it is time to look at becoming more frugal. Do you need to pay full price for everything? Probably not. You can use coupons at the grocery store, and use restaurant vouchers to enjoy a treat for half the price. There are excellent bargains to be found on eBay.com, and don't dismiss getting items for free from freecycle at freecycle.org. It really is true that one man's trash is another man's treasure, so shun your preconceptions and consider thinking outside of the box when you need new items for your home and family. By being more frugal in your spending, you are freeing up dollars that can be directed into that savings account.

The Bottom Line
We know we should save, but it often seems like an impossible feat - difficult to start because the end point seems such a long way away. With these steps you can see that small changes can make a huge difference when you look at the growth over a year.

By starting small and watching your savings grow, you'll ensure you're ready should an unexpected expense come your way. (To learn more, read The Top States For Saving Money.)

Related Articles
  1. Insurance

    Which Kind of Life Insurance Is Best for You?

    Parse the pros and cons of different policy types to ensure the best coverage for your needs.
  2. Investing

    Redefining the Stop-Loss

    Using Stop-losses for trading doesn’t mean ‘losing money’, but instead think about the money you'll start saving once you learn how they work.
  3. Insurance

    5 Ways to Lower Life Insurance Premiums

    Learn several effective methods for lowering life insurance premiums. These include quitting smoking and considering term life insurance.
  4. Budgeting

    The 7 Best Ways to Get Out of Debt

    Obtain information on how to put together and execute a plan to get out of debt, including the various steps and methods people use to become debt-free.
  5. Budgeting

    10 Ways to Save Money at the Farmers' Market

    Strategic shopping can help your budget as well as your health.
  6. Economics

    Understanding Switching Costs

    Consumers incur switching costs when they receive a monetary or other type of penalty for changing a supplier, brand or product.
  7. Investing

    What’s Holding Back the U.S. Consumer

    Even as job growth has surged and gasoline prices have plunged, U.S. consumers are proving slow to respond and repair their overextended balance sheets.
  8. Savings

    6 Ways to Save Money on Back-to-School Stuff

    Those school-supply lists just keep getting longer each year. Here's how to shop smart.
  9. Economics

    Explaining Market Penetration

    Market penetration is the measure of how much a good or service is being used within a total potential market.
  10. Economics

    Calculating the Marginal Rate of Substitution

    The marginal rate of substitution determines how much of one good a consumer will give up to obtain extra units of another good.
  1. Cost Accounting

    A type of accounting process that aims to capture a company's ...
  2. Internal Rate Of Return - IRR

    A metric used in capital budgeting measuring the profitability ...
  3. Duty Free

    Goods that international travelers can purchase without paying ...
  4. Linked Transfer Account

    Accounts held by an individual at a financial institution that ...
  5. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all ...
  6. Fast-Moving Consumer Goods (FMCG)

    These are consumer goods products that sell quickly at relatively ...
  1. What does marginal utility tell us about consumer choice?

    In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction ... Read Full Answer >>
  2. What are some common ways product differentiation is achieved?

    There are many ways to achieve product differentiation, some more common than others. Horizontal Differentiation Horizontal ... Read Full Answer >>
  3. How does a bank determine what my discretionary income is when making a loan decision?

    Discretionary income is the money left over from your gross income each month after taking out taxes and paying for necessities. ... Read Full Answer >>
  4. How does the trust maker transfer funds into a revocable trust?

    Once a revocable trust is created, a trust maker transfers funds or property into the trust by including them in a list with ... Read Full Answer >>
  5. What is the difference between an OEM (original equipment manufacturer) and a VAR ...

    An original equipment manufacturer (OEM) is a company that manufactures a basic product or a component product, such as a ... Read Full Answer >>
  6. Is the retail sector also affected by seasonal factors?

    Generally speaking, the retail sector is highly seasonal. Almost invariably, sales in the retail sector are highest in the ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!