Benefiting You

5 simple ways to boost your savings account each day

It’s no surprise we struggle with saving money as a society. A majority of Americans don’t have savings of at least $400. This can cause significant problems when an emergency arises.

If you’re facing this situation, you may not know where to start to save money. Thankfully, saving money isn’t difficult when you break it down into small steps. Here are five simple ways you can boost your savings each day to help you grow your savings account this year.

1. Simplify saving with automation.
Automation is the top way to grow your savings this year. Think of it as paying yourself first, as put by Automatic Millionaire author David Bach. It works like this: You get paid by your employer, and you have money transferred to your savings account.

It’s easy to forget to save. Automation takes the work out of saving as it’s done automatically for you. Another way to think of automating your saving is paying a bill to your future self.

“A great way to boost your savings is to organize your monthly budget where savings becomes a bill just like a mortgage payment or car payment,” says Jason Tate, ChFC®, CLU®, CASL®, founder of Jason Tate Financial Consulting.

It doesn’t matter if you save $5 or $50. Find what works for you and increase it as you’re able.

2. Negotiate one bill.
Budgeting is a great way to find opportunities for saving more money — but it’s not for everyone. If you don’t actively budget, you can still find ways to boost your savings by negotiating at least one bill down to a lower rate.

Many service providers are open to negotiating monthly charges to keep your business. Some discounts may not be permanent but can be a great way to give your savings a jolt. You can take it a step further and add the accrued savings to what you’ve already automated in step one.

3. Find a way to spend less on what you want.
It can be easy to justify spending on something you want or love. While fine in moderation, it can easily add up when not monitored. You don’t have to cut the spending altogether, but you can find ways to spend less and pocket the savings.

One example is buying organic food. “Consider buying your organic food at Walmart or Aldi,” says J.R. Duren, personal finance expert with Highya.com. “You can save a decent amount of money on your monthly grocery bill by shopping at these lower-priced stores compared with shopping exclusively at Trader Joe’s or Whole Foods. Walmart and Aldi may not win style points, but they’ll save you money.”

Again, you don’t need to completely cut what you like but finding savings opportunities can help boost your savings in a powerful way.

4. Use an app.
It’s easy to justify not saving money because of perceived difficulty. When paired with the idea that saving a small amount won’t do anything, we betray our financial goals.

There are plenty of apps that make saving easy and help grow your savings in small amounts. Apps like Digit, Dobot and Qapital let you automate small amounts to boost your savings.

One example is rounding up purchases to save the difference. You can even use an app like Trim to negotiate bills or cut old, unused subscriptions to free up money for saving.

5. Find one way to make extra money.
A commonly overlooked way to boost your savings is making extra money. Extra money comes in many forms, from asking for a raise at work to starting a side hustle.

You can take the extra money earned and devote it specifically to savings, otherwise known as mental accounting. Just make sure you’re not overlooking something like paying off debt when using mental accounting, as it could cost you in the long run.

It comes down to behavior.
Saving money becomes more challenging than it needs to be when we attempt to do it with the wrong mindset. We often think we need to cut everything, when that’s typically not the case and only makes it more difficult to accomplish your desired goal.

As Tate says, “Savings is as much about behavior and confidence as much as anything.” The right behavior is one that views money as a tool that must be used wisely and with balance.

You may not have that mentality now, but it’s one you can grow. Start out by finding one or two areas you can save, and you’ll be surprised at how your savings will grow throughout the year and in the future.

Tags: | | | |