8 Ways to Increase Your Savings
Thinking about the balance in your savings account gives you anxiety. You’re not alone. 1 in 4 Americans have no money set aside for emergencies and the majority of American adults would find it hard to cope with an unexpected expense.
Most financial planners and expert recommend having a minimum of 6 months’ worth of expenses socked away in an emergency fund. For many people, that just seems like a pipe dream.
Except it’s not that far out of reach. Doing a little each day will get you closer than if you hadn’t tried at all.
Here are 8 ways to help you accumulate the emergency fund of your dreams.
Track Your Spending
You have to start by tracking your spending. You know what they say, the first step to dealing with a problem is acknowledging that there is a problem. It’s the same thing here. When you are looking to build up a healthy savings fund, you must start with increased self-awareness.
Fire up a spreadsheet and keep track of every expense, or use a spending tracker app to help you.
Save First. Spend Second.
The key to smart money management is paying yourself first. That means setting aside money to grow your savings.
Once you’ve assessed your spending, figure out what number makes sense for you. It might be 10%, or 5% of your income, but whatever it is – set the goal and commit to sticking to it. Your goal does not have to be huge, it just needs to be realistic.
The best way to quickly build up your savings is to use the power of automation.
Set up an automated transfer that moves money to your savings account at the beginning of the month, or at any predetermined point that you like. By automating this transfer, you’ll never have to worry about remembering to do it yourself. It just happens.
You can take this further and completely automate your finances. That means automating bill payments and investment contributions in addition to adding to your savings fund. Go ahead, put your finances on autopilot.
Eliminate unnecessary spending
You’re tracking your spending, and you’re setting aside a small portion of your income into your savings every month. Now it’s time to think about cutting out unnecessary spending.
Maybe you find that you spend twice as much eating out as you do on groceries. That’s an easy area for you to cut down on. Pack a lunch instead!
Use Apps like Digit or Qapital
If you find it really challenging to save money then why not enlist help from apps like Qapital or Digit?
Both apps will let you round up your purchases to the nearest dollar and push the difference into your savings account. Qapital says their average user saves $44 a month, or more than $500 a year, using this method. For someone who finds it challenging to put aside just $100 into their emergency fund, this could be the answer.
There are numerous programs like this. For example, Bank of America offers a “Keep the Change” savings program that does the same thing. You just need one of their debit cards.
Negotiate Your Bills
It’s funny, we almost never think about negotiating the price of our bills. Things like our phone or internet bill are payments we make on a recurring basis and small wins here can add up to big gains over time.
Sometimes calling your cell phone provider and asking for a new deal can work. You could get a lower monthly bill and pass on the savings to your emergency fund.
Take a moment, write down all the recurring payments you make and evaluate them. The ones you can cut out, do so, and the ones you can’t – think about how you could negotiate a lower price.
Sign up for bank account offers
Many banks offer generous welcome bonuses for opening a checking account with them.
For example, Chase currently has an offer where they give you $300 when you open up a checking account with them and set up a direct deposit. If you don’t mind taking the time to switch banks, this could be a simple and effective way to generate some savings.
Make More Money
At some point, there’s only so much scrimping and saving you can do. Then the next option to increasing your savings is to earn more money.
If you have more money, then you can save more money.
Easier said than done, of course, but the idea remains. Try to look at what skills you have, which you can leverage to earn some money on the side. There are tons of online marketplaces that serve to connect freelancers and clients, and if you can read or write then you can probably earn money in a side hustle.