6 ways to jump-start your savings account

Editor's note: This article was originally published on savingsaccounts.com. It has been reprinted here with permission.

While American households have succeeded at paying down some of their debt over the past three years, the median household's total savings have declined when adjusted for inflation. That's according to the latest Federal Reserve Survey of Consumer Finances, an extensive study collected every three years that measures the state of household finances in the U.S.

The findings suggest that most Americans' savings accounts could use a jump start. In terms of the average American family's effort to accumulate savings, it is as if the Great Recession was a period of sub-zero weather that sapped the car's battery. The weather may have warmed up since, but the battery is still dead.

Reversing the decline in savings

The Fed survey reveals that median household financial assets have declined by an inflation-adjusted 7.8 percent over the past three years and stand at a flimsy $21,200. Certainly, savings account interest rates that have failed to keep up with inflation have not helped, but the past three years have been pretty good for the stock market. The continued slippage in total savings means that people simply are not doing enough to save.

If your savings effort needs a jump start, here are six things you can try:

1. Make every purchase go through the budget. No more impulse buying — keep a monthly budget and don't buy anything that is not in the budget. Not only will this force you to make trade-offs when new purchase ideas come your way, but it will slow down the act of buying so the impulse may wear off.
2. Lock up your plastic. Here's a somewhat radical solution for incurable compulsive shoppers: Lock your credit and debit cards in a home safe, and only take them out when you are going to make a budgeted purchase.
3. Make your bankers compete. We're not talking guys in pinstriped suits running the hundred-yard dash, but bankers should have to sweat a bit for your business. Shop around for the best savings account rates and a free checking account. In both cases, online-based accounts may be your best bet.
4. Save before borrowing. It has become routine for Americans to use credit whenever they want to buy something. You can still use credit for major purchases like a car, but force yourself to save more of the purchase price before you do. This will sharpen your budget discipline, and a bigger down payment may improve your loan terms.
5. Shorten your loan terms. Consider a four-year rather than a six-year car loan, or even a 15-year rather than a 30-year mortgage. Shorter loan terms mean lower interest rates, and fewer years of paying interest.
6. Devote new money to saving. The most painless way to save more is to plow most of each new raise straight into savings. That way you save more without having to take a step back in lifestyle, and over time those savings can represent a greater and greater portion of your income.

The Great Recession dealt a heavy blow to family savings, but it is over. It is time to stop blaming the source of the problem and focus instead on fixing it.

Richard Barrington is a personal finance expert for MoneyRates.com. He has earned the CFA designation and is a 20-year veteran of the financial industry.