Build your savings account one step at a time
Though we all know it’s important, when we feel swamped with bills, living expenses, and the desire to purchase the latest gadgets, it can seem very difficult to take the time to pay attention to our savings account. Here are some tips and tricks on ways to make saving, whether for an emergency fund, savings account, or retirement fund, a natural part of your budget and planning.
Keep your eye on the prize.
Know what you want to save for specifically and stick to it. Whether it’s a large purchase such as a car or home, or a long-term goal of an emergency fund or healthy retirement account, knowing exactly what you need to save for can make it a little easier to put off an impulse purchase today and save it for tomorrow.
Establish and track your budget.
You can’t really know how much you can save, until you see where your money is going now. And with online and mobile platforms for budgeting, this has become even easier. Some popular programs include Mint.com and Mvelopes which allow you to set budgets for your spending and for saving. By making savings a primary budget item, you can “pay yourself first” and make sure you’re consistently putting away a percentage of your income to savings.
Eliminate unnecessary spending.
After establishing your budget you may start to see that you have a curious habit for daily pumpkin spice lattes. Now that you know this, you can start to scale back those unnecessary purchases and put that money towards savings. Even cutting back on expensive coffee and lunches out a few times a week can really start to add up over time.
Another place where you might be able add more of your budget to savings is by eliminating cable. Think about it – if your quality time is spent binge watching “How I Met Your Mother” on Netflix, you can afford to lose cable. And if you find you just can’t miss that latest episode of House Hunters International, you can always scale back to a smaller basic cable package.
Save extra funds.
Don’t treat your entire bonus or tax return as money to spend on Apple’s latest product. Put a portion (or all) of that extra unbudgeted money back into savings. Another easy way to get extra cash (yes, extra CASH) is to consider a cash back rewards credit card. If you immediately put those cash rewards back into savings, they can really start to compound over time.
Make it automatic.
Between busy schedules and forgetful minds, many of us will simply forget to transfer that money out of our accounts even after it has been budgeted. Once you’ve decided on your amount, set up automatic transfers to your savings account on a monthly or bi-weekly basis, and you won’t have to think about it again.