Illinois families face many economic uncertainties for the coming year. The cost of food, housing, and healthcare continue to rise, along with overall inflation. The job market seems frozen with many employers neither hiring nor firing.
A poll this past fall by the Institute of Politics at Harvard Kennedy School found that 43% of young Americans (age 18 to 29) said they were struggling with limited financial security. Inflation was their number one concern, cited by 37% of respondents, followed by healthcare at 15%, and housing at 12%. Only 30% of respondents believed they would be better off financially than their parents.
The best ways to save money in 2026 are more than just discipline; it also requires having the right tools, bank accounts, and strategy. We offer this guideline on how to save money in Illinois as a way of helping our customers build financial stability and to save responsibly.
1. Start with Clear Savings Goals
Your financial goals for 2026 should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound. Rather than just “saving more money” or “reducing debt,” your goals should be specific, such as saving a certain amount, paying off a debt, or reducing it by a given amount. By being specific, you can give yourself something to aim for and increase your chances of following through and meeting that goal.
You can break this down into:
- Short-term goals: From six months to two years.
- Midterm goals: From two years to five years.
- Long-term goals: More than five years.
Your short-term goals might be setting up an emergency fund that would cover three to six months’ worth of your household living expenses, and to do so within a year. A midterm goal might be to save up a specific amount for a down payment on a major purchase within the next five years, such as buying a home or a vehicle. A long-term goal could be to set up a college fund or retirement fund and grow it to a specific amount within the next 15 years.
Of course, your own savings goals for 2026 depend on your needs and your household, as well as your own particular circumstances. Try to outline three to five savings goals with different timelines for achieving them.
2. Know Your Savings Options (and What Each Is Best For)
You have a couple of options for an Illinois savings account that depend on how much you intend to save, how much interest you’ll earn, and any restrictions that each option has.
Traditional savings accounts offer the convenience of a low minimum deposit, low fees, and the ability to deposit and make withdrawals as needed while also earning interest.
High-yield savings accounts, such as the Extreme Green Savings, offer higher interest rates than traditional savings accounts and comes with checking-type advantages. High-yield accounts frequently have minimum deposit and balance requirements if you want to avoid fees. Some of them offer checks and debit cards.
Money market savings accounts have similar levels of interest rates as high-yield savings accounts and may offer tiered interest rates that increase based on your balance within the account. They usually have minimum deposit and balance amounts, if you want to avoid fees. The number of transactions per month and exceeding that number could result in fees.
If you have savings that you don’t need for daily expenses, a Certificate of Deposit (CD) from Dieterich Bank lets you earn more interest than a regular savings account. Terms can range from just a few weeks to five years, and generally, a longer term earns you a higher rate. While the money remains yours, it is committed for the duration of the term; if you need to withdraw the funds early, you will typically pay an early withdrawal penalty. To keep your money more accessible, you might consider a CD ladder, where you split your funds into multiple CDs of different lengths to ensure a portion of your money becomes available at regular intervals.
One of the easiest ways to grow your balance is to take the manual work out of it. By setting up automatic transfers from your Dieterich Bank checking to your savings account, you can ‘set it and forget it.’ Whether it’s once a week or every payday, automating your savings ensures you’re paying yourself first helping you reach your goals without even having to think about it.
3. Prioritize Safety and Stability
Regardless of the type of savings accounts you have, each of them is preferable to keeping your funds at home. As a FDIC-insured bank, Dieterich customers automatically has up to $250,000 in FDIC insurance across all their savings accounts, checking accounts, and CDs. Keeping large amounts of funds at home is not recommended because they could be vulnerable to theft, fire, or some other disaster. A savings account also offers the benefit of earning interest while being able to access your funds from a bank or ATM in case of an emergency or some other need.
4. Build a Habit: Automate and Plan Deposits
Many of our customers have their income and paychecks deposited into a checking account that they use for paying their bills and withdrawing cash. They also have a certain amount deposited into one or more savings accounts. If your employer allows, you could have part of each paycheck deposited into different accounts.
Automatically depositing part of your funds into a savings account makes it more likely that you’ll reach your savings goals. Many of our customers discover that having funds removed from their checking account makes it far less likely for them to spend more than they budget for each month. We also encourage you to use any windfall to boost your savings. If you receive a bonus at work, a tax refund, or earn some money on a side gig, take a close look at your savings goals and put that money into a savings account to avoid the temptation of spending it.
We also recommend keeping track of how you spend every dollar. If this seems inconvenient, set a goal of doing this for a week and then a month. You could use a pen and paper, a budgeting app on your phone, or a file on a computer. Once you have a good idea of how you spend your money, identify all your unnecessary expenses and consider depositing them into a savings account instead.
Your essential spending includes things like housing (rent or mortgage), groceries, transportation, clothing, and healthcare. Nonessential spending includes food delivery, restaurant meals, jewelry, and designer clothes. Keeping track of your spending not only helps to identify ways of saving more money, it can also keep you focused on your savings goals.
5. Match Savings Strategies to Your Life Stage or Major Goals
Your age and where you are on life’s journey are important factors in putting together a budget and savings goals. Here are a few key milestones to consider:
Savings Goals for Your 20s
People in their 20s are just getting started on their careers. They may have student loans to pay off, are looking for an apartment, and want to save up for a major purchase such as a car. They might also be thinking of saving up for the down payment on a home. For many of them, this is also the time when they start to build a credit rating. Having a good credit history can affect your ability to obtain a loan and the interest rate you’ll have to pay.
People in their 20s can build a good credit history by paying their bills on time and avoiding the temptation of overusing their credit cards. While retirement might seem like a long way off, if your employer offers a 401(k), financial experts recommend taking advantage of this, especially if your employer matches your contributions. The more you set aside for your retirement when you’re young, the better off you’ll be in the long run because your funds grow over time with compound interest.
Savings Goals for Growing Families
As your family grows, your financial priorities often shift. A helpful benchmark for your 30s is to aim for a retirement balance equal to one year’s salary. Additionally, while the standard rule for an emergency fund is three to six months of living expenses, growing families often find peace of mind by aiming for the higher end of that range to cover those unexpected ‘life happens’ moments.
If one person is the primary breadwinner, if your income is unsteady, and you have several mouths to feed at home, you might need a larger emergency fund. You should also consider estate planning and life insurance to make sure your family is financially protected. At this point, hopefully, you’ve paid off any student loans or are close to doing so, which would allow you to focus on education funds for your offspring.
Savings Goals for Homebuyers
For those who are saving up for a down payment on a home, paying off your existing debts is just as important as that down payment. Getting your debts paid off can improve your credit score and increase your chance of qualifying for a mortgage at a favorable interest rate. If you have more than one type of debt, you might focus on paying off those that have the highest interest rate, as this would free up the funds that you can use for other debt reductions and your savings.
Savings Goals for Long-Term Planners
Your long-term savings goals depend on which phase of life you’re in and your household’s current and future needs. Financial experts recommend having the following amount saved for retirement, based on your age:
- 1x your annual salary by age 30.
- 3x your annual salary by age 40.
- 6x your annual salary by age 50.
- 8x your annual salary by age 60.
- 10x your annual salary by your retirement age (67).
Of course, you’ll also need to consider your medical needs. You might consider a long-term care insurance policy to provide for your golden years and protect your retirement savings from the cost of nursing home care. You should also make sure that your will is kept up to date to reflect any changes in your family, lifestyle, and financial situation.
6. Pay Attention to Rates, Fees, and Account Rules
As you work on your savings plan, setting and meeting your goals, make sure you pay attention to the fine print and be aware of anything that might impact your finances. High-yield savings accounts, money market accounts, and other types of savings accounts may have minimum balance requirements and withdrawal limits, with fees if you exceed these requirements.
Of course, the interest rate on any type of savings account will fluctuate over time, so diversifying your funds into different types of savings options might make sense, as it can reduce the impact that rate changes can have on your funds. If interest rates are expected to fall, locking in a higher rate with a long-term CD could help reduce the impact that falling rates have on the rest of your savings. It’s one of the reasons investment advisors recommend a diverse, balanced portfolio for long-term investments, depending on your risk tolerance, when you might need your funds, and when you plan to retire.
7. The Advantage of Saving with a Local Illinois Bank
By working with a local bank, you can receive advice and support from a community-focused institution and individuals who have a stake in seeing you and your family succeed. We can offer the kind of personalized guidance not found at national institutions. We make all our lending decisions locally, and keeping your savings with us means they’ll be used to benefit the community.
Work with Us to Meet Your Savings Goals
Keeping track of your spending, setting goals, and sticking to them are important ways to strengthen your savings in 2026 and prepare for the unexpected. As a community bank, Dietrich offers flexible, safe, and savings tools, as well as personalized advice to help you make the most of what you earn. You can contact us or visit your nearest branch in South Central and Southwest Illinois to learn more.
