NEW YORK — 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 the rent, car payments, 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 the 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 five steps to help boost your savings:
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 about 85 percent of US employees have their pay deposited directly into a bank account, only 18 percent send part of their income into a savings account, said Katie Bryan, spokeswoman for America Saves, a campaign of the Consumer Federation of America.
Not only are many people failing to take steps to build up an emergency fund, but some are taking on more 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,'' Bryan said.
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.
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 and Wells Fargo, generally don't offer enough of a yield to grow your balance meaningfully.
But you'll probably find offers of more attractive yields at online banks such as Ally Bank and EverBank.
These Internet banks have few or no branches, so they don't have the expenses of brick-and-mortar lenders. But some require minimum balances, especially for their high-yield accounts. And you'll have to be OK with being able to access your cash only via ATMs or by setting up wire transfers.
EverBank was offering an annual percentage yield of 1.01 percent on its money-market account recently, according to Bankrate.com. That was the highest APY being offered, though the account requires a minimum deposit of $1,500. Synchrony Bank's savings account offered a 0.95 APY, with no minimum to open but with a monthly $5 fee.
For a no-minimum, no monthly-fee savings account, GE Capital Bank was offering a 0.90 APY. By comparison, basic savings accounts at Bank of America and Wells Fargo advertised an APY of 0.01.
Online calculators can help estimate how much your balance will grow. See http://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx .
The knock against certificates of deposit is that, over the long term, they rarely keep up with inflation because they're risk-free. You agree to lock up your money in a CD for a period of time, usually six months, a year, or more, and then you get back your original investment plus the promised interest.
But interest rates could surge while your money was in the CD at a lower rate.
Still, CDs can be another way to let your savings grow with minimal risk, as long as you keep the CD terms at six months, said Marty Durbin, a certified public accountant and personal finance specialist in Arlington, Texas.
''If it's a six-month CD, you might get more out of it than you would out of a savings account,'' Durbin said.
One approach, known as laddering, spreads money across several CDs that mature, or pay off, at different times. If interest rates rise, you will be able to jump to that higher rate when the next CD matures.
For guidance, try this online CD ladder calculator: http://www.bankrate.com/calculators/savings/cd-laddering-calculator.aspx .
The fastest way to save is when someone, like your employer, offers to match a portion of what you set aside.
If your employer offers a 401(k) retirement plan with such a perk, you're leaving money on the table if you don't put in at least the minimum amount to get the full matching funds.
''You're essentially being paid to save there,'' said Catherine Golladay, vice president of 401(k) participant services at Charles Schwab.