Are you ready to grow your savings, but you aren’t sure how to go about it?
Growing our savings has been a big financial priority for us in the last few years. By focusing on our savings, we were able to reach our biggest goal of becoming homeowners!
We saved up diligently for a down payment, and also to have some cash on hand to fix up our home the way we wanted it. We were disciplined, and got it done.
Of course, that’s not the end of the story, since the need for savings never ends. We’re now in the process of building up a healthy emergency fund. Here’s how we were able to quickly save for a home, and now for an e-fund:
Set up an account that works for you
The first step to saving is to create a dedicated account for the money. There are plenty of options out there today, including savings account that are attached to your checking account at your bank. That’s what we use for our emergency fund. You can also consider Capital One 360, PayPal, and more.
Do your research and choose the savings account that sounds like the best fit for you. If you’re starting off with a healthy balance, then consider a high yield savings account that you can build upon.
We set up a savings account with our bank that’s attached to our checking, and every time that we make a purchase or payment with debit, a dollar is transferred over to savings. This is a nice little way to ensure that money is being saved. It also makes it easy for us to automate a transfer of a set amount each month into savings without having to think about it.
Pay yourself first
I’m sure you’ve heard this before, but perhaps you haven’t started to put it into practice. If not, start doing it now!
Maybe you don’t make a lot of money, or you don’t have a lot of wiggle room in your budget- that’s okay. You can still pay yourself first by taking a small amount from each check and putting it right into your savings. Do this before you pay bills, go shopping, head out to dinner or the movies, etc.
Make paying yourself first a priority, no matter what.
Make Savings a budget category
Your savings account (or accounts) should be a priority, whether we’re talking retirement, emergency fund, vacation fund, or just rainy day savings.
To make sure that it doesn’t get overlooked, create a category in your budget. This is ideal if you’re going to be adding the same amount each month, but it still works if the amount fluctuates. The point is that you have it accounted for.
Trim the fat
You should be going through your budget every so often to keep tabs on things anyway, but it’s especially helpful when you’re trying to grow your savings.
Go through each budget category and see where you can trim the fat. Take a hard look at variable spending, and see what can be let go of. For those fixed expenses, you may be able to get your bills lowered by negotiating for better rates. Why pay $100 every month for phone service when you could be paying $30? That $70 difference could be going into your savings account each month.
Make smart spending decisions
Ultimately, nothing will save you more money than simply not spending. Make smart spending decisions, especially when it comes to big purchases. If you want to grow your savings quickly, you need to be aware of how every dollar you spend will affect your goals.
It takes a lot of effort and discipline to grow your savings. Unless you come into a financial windfall, it won’t happen overnight. With a little planning, keep your eyes fixed on your goals and watch those numbers go up every month!