Looking for practical ways to increase your savings? There are plenty of small changes you can make to your finances to help you sock away more of your income each month. Implement some or all of the eight tips below and watch your savings stack up.
Ways to Increase Your Savings
1. Save As Soon As You Get Paid
Rather than seeing how much cash you have leftover at the end of the month, put that amount you want to save into a separate account on payday to increase your savings. This effectively means you’re paying yourself first.
If you keep your anticipated savings in your normal checking account until the end of the month, it’s harder to keep it from getting absorbed by everyday spending.
2. Assign Every Dollar to a Purpose
Make sure your money is working really hard for you by giving every dollar a job. For example, allocate X amount of dollars to your mortgage or rent, and X amount of dollars to grocery shopping.
Assigning every dollar helps you to see how much you can potentially save and encourages mindful spending. You can then assign X amount of dollars to your savings pot!
3. Only Buy What You Need
Going one step further, it makes good savings sense to avoid buying stuff you don’t need. Cut back on non-essential spending. If you don’t use your gym membership, cancel it. Opt for Netflix rather than expensive cable TV. Buy used, not new, if you can.
Consider the last few purchases you bought. Have you made full use of them, or are they lying around your home somewhere untouched? If that’s the case, did you really need them?
4. Use a Savings Round-up App
Acorns is an app that lets you save and invest your spare change. It works by automatically setting aside the spare change leftover from everyday purchases.
For example, if you spend $8.57 on some groceries, the Acorns app will round your purchase up to $9 and put aside $0.43 for you to micro-invest in Exchange Traded Funds (ETFs).
Overdraft Apps is a good website to check for reviews on apps that can help you save money. It also covers the best cash advance apps to use if you want to avoid costly overdraft fees.
5. Shop Around for a High Yield Online Savings Account
Put your savings into an account where it can earn a decent rate of interest. For example, CIT Bank offers a ‘Savings Builder’ account that rewards savers who maintain a balance of $25,000 per month, or who can save at least $100 per month. The rate offered is up to 1.75% APY. (A minimum opening deposit of $100 applies.)
Another savings account worth checking out is Marcus Sach’s ‘High-yield Online Savings Account’. It doesn’t require a minimum opening deposit and offers an APY of 1.70%.
6. Declutter and Sell Your Stuff
Having a good clear-out is helpful for a few reasons. Firstly, it helps you to see all the stuff you’ve accumulated over the years, that you no longer need, use, or want. This, in turn, can help you be more mindful about spending in the future.
Secondly, you could potentially sell some of your old things on eBay or Craigslist to make some cash to top up your savings account. Thirdly, decluttering is really therapeutic!
7. Avoid Unnecessary Fees
There’s nothing more unsatisfying than visiting an out-of-network ATM and being landed with a charge that you could quite easily have avoided (and instead put aside the equivalent in savings).
ATM fees in the United States can be anywhere in the range of $3.00 to $6.00. In 2019, the average total out-of-network ATM fee was $4.72. Be conscious about where you’re getting cash from – use networked or fee-free ATMs where possible.
Another unnecessary fee you should avoid is overdraft fees. You can either opt out of overdraft coverage with your bank, apply for account transfer overdraft coverage, or use an app that alerts you when you’re about to overdraw.
8. Do More Free Things
Increase your savings by swapping expensive socializing activities for free(ish) experiences instead. For example, instead of eating out in a restaurant, cook and eat the food you have at home. Rather than taking a trip abroad, see the sights on your doorstep. Visit the park or beach rather than paying for an excursion.
Practical Ways to Save
You can ramp up your savings efforts just by making some simple changes to the way you manage your money, and by adopting a mindful attitude towards spending and saving.
Practical tips include paying yourself first, giving every dollar a purpose, doing more free things, only buying what you need, and avoiding unnecessary fees.
Make use of high-yield savings accounts that offer a good rate of interest. And check out those smartphone apps that can help you save automatically or budget more effectively.