If you are a salaried person, you know how salary accounts make our life convenient. Gone are the days when salaried individuals used to receive their salaries in cash or by cheque. Every month, individuals had to visit their bank to deposit the cash or salary cheque into their savings bank account and later issue a self-cheque to withdraw money from their account. To make the process simpler, many employers started depositing the salary directly into the employees' bank accounts, which introduced a new type of saving account called a Salary Account. Imagine Beating The Market By As Much As 70% This is HUGE. That is the number, one of our most premium and successful research services has achieved. Mind you it is a less known strategy to discover huge potential opportunities. And to top it, it has a successful track record of over 15 years. A track record that says this has the potential to beat the market by as much as 70%! What is a Savings Account? A savings account is one of t...
Savings, cushion, nest egg, buffer, emergency fund – whatever you call it, you’ll never be sorry to have extra money. In fact, the sooner you start building savings, the sooner you can reach your financial goals, like making a major purchase, going on a trip, working on home repairs, or even retiring.
Start by knowing how to create a savings plan
First, map out your financial priorities based on goals. A new home, a new car or a vacation are all great examples of goal-based savings. Having defined goals makes saving money more meaningful and will also help you stick with it.
If you don't already have a savings account, you’ll need to open one. Look for a bank that offers savings accounts that earn interest. To prevent yourself from being tempted to dip into your savings, you may want to set up your account at a different bank than your primary, so it’s not as easy to access the funds. Also consider not getting a debit card for the account.
Now that you’re set up with a savings account, where can you find money to fund your plan? Here are some ideas on how to build savings:
Stick to a budget
Create a budget that includes a new line item: savings. As you reduce spending in some areas, move that money into your savings account. Pay into this account every month when you pay your utility, phone and other bills. Be sure to check out our Budgeting for Families course, a free online financial education class that shows you how to create a savings plan and budget that meet your family’s needs. Then, use our budget calculator to make a budget that you can stick to.Automate savings through paycheck deductions
The best way to build your savings account is by automating the process. Ask your employer if you can set up automated deductions from your paycheck directly into your savings account. Calculate how much money from each paycheck you can afford to put in savings. Whether it's $10 or $100, your balance will grow nicely over time.Deposit tax refunds and bonuses
Consider depositing money from tax refunds, stimulus checks, Child Tax Credits, work bonuses and birthday presents into your savings account. Even if you only deposit a percentage of each, it will help you work toward building savings.Sell stuff for extra cash
From consigning your clothes to selling a coin collection on eBay, turn the clutter in your house into extra cash to fund your savings account.Cut back on food costs
According to the U.S. Bureau of Labor Statistics, the average American spends $3,459 on dining out.2 If you’re currently dining out 3 times a week, try cutting back to twice a week. You’d be surprised by how much a small change can save you in the long run. Besides, there are plenty of ways to cook on a budget — and maybe you’ll even discover your inner chef!Start a side hustle
If you want to build savings, earn more money! These days, there are plenty of ways to earn extra money from home. If you don’t have the time to consistently work more hours, look for seasonal opportunities. Consider any additional income as bonus money to build your savings account.Use “round-up” features for card purchases
Sign up for round up apps and debit cards that round up your everyday purchases to the nearest dollar, automatically depositing your change into a savings account. Over time, this well help to build savings.Find missing money
Did you know that states hold onto money that’s due to you, but for whatever reason, cannot be delivered to you? You can find unclaimed money from the government to see if anything is owed to you. If you are owed, you can claim the money and receive a check in the mail. Then, deposit it straight into your savings account.Invest
While a savings account is a great way to start building savings, investing can grow your money faster over the long-term. If you already have a 401k through your employer, you can still invest in other assets like stocks, bonds, mutual funds and ETFs. There are a variety of different automated investing solutions known as robo-advisors that can help you easily invest your money to help boost your savings. And remember, you don’t need to be rich to invest.
What is the 30-Day Rule?
The 30-Day Rule is a savings strategy used to eliminate extra spending.1 The rule states that if you really want to buy something, wait 30 days before doing so. The 30 days is used as a grace period to see if you really want to make the purchase, or if your desire for the item decreases. But if you still really want it, the extra time allows you to research more affordable alternatives and assess the pros of cons of spending your hard-earned money. If you end up saving for the item and decide it’s not necessary, it’s a great opportunity to add that money to your savings or investment account.
What are the fastest ways to increase savings?
Savings are typically built over time. But if you’re looking to increase savings fast, here are a couple of options:
Look for banks that offer sign-up bonuses
Many banks will offer hundreds, sometimes even thousands of dollars, for creating a new account with them. That’s free money what will quickly boost your savings! Learn about the best bank bonuses and be sure to read the fine print for each.Ask for a raise or get a higher-paying job
The fastest way to increase savings is to increase earnings. Don’t be afraid to ask for a raise. When you get your raise, increase the contributions to your savings account through your automatic deductions. If your employer doesn’t approve of a raise, then start looking for a higher-paying job. If you receive a good offer, see if your existing employer will match the salary or rate.
Build your savings account over time
When it comes to building savings, time is your secret weapon. Consistent contributions, paired with compound interest, will build your savings over time. Having substantial savings is crucial to preparing for emergency situations and will help you live a financially well life. To maximize your savings contributions, find out what kind of saver you are and implement additional strategies that align with your personality.
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