More Than Half of Americans Have Seen Their Savings Shrink Over the Past Year. Here’s How to Rebuild

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Replenishing your savings might take work, but it can be done. 

The money in your savings account is cash you may be relying on to get you through an emergency situation, like a sudden home repair or a period of unemployment. And without a solid amount of savings, you could end up with credit card debt if a string of expenses comes your way that you weren’t anticipating.

Unfortunately, though, a lot of people have seen their savings account balances decline in the past year, according to a recent report by SecureSave. In fact, 54% of Americans closed out the past year with less money in the bank than they had 12 months prior. And a big reason for that is likely none other than inflation.

In 2022, inflation surged to an extreme degree, and it drove up the cost of everything from food to housing to transportation. As such, many people had no choice but to raid their savings to keep up.

If you’re hoping to rebuild your savings after dipping in last year, you should know that it can be done. But you may need to be strategic about it.

Take advantage of the gig economy

The paycheck you collect from your employer might only go so far in giving you buying power while allowing you to save money. But if you’re willing to take on a second job, you can boost your income in a meaningful way. And since that extra money won’t be earmarked for bills, you can use it to build your savings back up.

Of course, the side hustle you seek out should hinge on your specific savings goals. If you’re hoping to put $1,000 back into your savings account by the end of the year, you may only need to take on the occasional gig, like house-sitting or pet-sitting jobs.

But if you’re hoping to replenish a much larger amount, you may need side work that’s steady and consistent, like working evening shifts at a retail store or driving several nights a week for a ride-hailing company. Either way, there are many options to look at, so assess your savings goals to find the right fit.

Rethink your spending

It’s unreasonable to spend no money at all on leisure and small luxuries. But if your savings have recently taken a pretty big hit, then it may be time to curb your non-essential spending.

That could mean dining out only once a month instead of once a week, and pledging to make your own coffee six out of seven days a week until your savings are in better shape. You might also consider canceling small expenses that could add up, like streaming services and subscriptions.

It’s easy to see why so many people had to raid their savings in 2022. But it’s also important to try to put back the money that’s no longer sitting in your savings account. If you’re willing to work a second job and spend less on non-essential purchases, you may find that you’re able to replenish your savings by the time 2023 comes to an end.

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