Dreams of financial independence often center on fantasies about sudden wealth.
But financial freedom isn't always about possessing great riches. For some, it can be as simple as getting a bit more breathing room from financial constraints like their rent, car payment and other living expenses. That's a goal most people can work toward by making a concerted effort to regularly set aside a portion of their income.
Although it may feel like well-worn advice, saving is at the core of financial independence and can help you through the loss of a job or a sudden financial hardship. And yet, many people are unable or reluctant to put money away even for emergencies.
Just over one in four Americans don't have any emergency savings, according to a June phone survey commissioned by personal finance portal Bankrate.com. And among those who have money put away, half have saved less than three months' expenses.
"People are woefully under-saved for both emergencies and retirement," said Greg McBride, senior financial analyst at Bankrate.com. "You can raise your income or you can cut your expenses, but either way, emergency savings doesn't happen without discipline."
Here are six steps to help boost your savings:
1. MAKE IT AUTOMATIC
For many, the biggest hurdle is getting into the habit of setting part of every paycheck aside.
"If you wait until the end of the month and try to save what's left over, all too often, nothing is left over," McBride said.
So don't leave it up to discretion. Instead, arrange for a portion of your paycheck -- some financial experts recommend as much as 10 percent -- to be automatically deposited into a savings account.
Although some 85 percent of U.S. employees have their pay deposited directly into a bank account, only 18 percent split part of their income into a savings account, said Katie Bryan, spokeswoman for America Saves, a campaign of the Consumer Federation of America.
2. TACKLE CREDIT CARD DEBT
While many people haven't taken steps to save an emergency fund, some are increasingly taking on credit card debt.
Consumer credit card debt grew at an annualized rate of 12.3 percent in April, the fastest pace since November 2001, according to the Federal Reserve.
Carrying balances for months or years on end will just keep you financially shackled and make it tougher to save. "We consider paying down debt a saving strategy," said Bryan.
You'll pay down your credit cards faster if you don't hold back any extra income as savings, but Bryan suggests paying off your cards and building up savings at the same time.
Begin by making minimum payments on your cards until you cobble together $500 or $1,000 for unforeseen expenses, such as a car repair. Afterward, focus on paying down the card with the highest interest first.
3. CONSIDER ONLINE BANKS
Savings and money-market accounts offer the fastest way to access cash, a key consideration for your emergency fund. The drawback is that savings accounts at big banks, such as Bank of America or Wells Fargo, generally don't offer enough of a yield to grow your balance meaningfully.