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 saving money, we were able to reach our biggest short-term goal of becoming homeowners.
We saved up diligently for a down payment. We also wanted to have some additional cash on hand to fix up our home the way we wanted it. We were disciplined about saving and spending wisely, and we got it done. You can do it, too!
Of course, that’s not the end of our saving story, since the need for savings never ends. In fact, as homeowners, our emergency fund is essential to up-keeping and maintaining our house. We’re now in the process of working towards building up a healthy emergency fund.
These simple tricks are how we were able to quickly save money for a home, and now for an emergency 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 accounts 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 then 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.
If every last dollar that you earn goes towards bills and/or debt repayment, find a way to trim costs somewhere. Switch cell phone providers/plans, cut cable, start meal planning, etc. Find some way, anyway, to reduce your spending.
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 go through your budget every so often to keep tabs on things anyway. Checking in on your budget and reviewing goals is 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 your 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 single dollar that you spend will affect your goals.
It takes a lot of effort and a whole lot of 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!