There is no better time than the present to start setting yourself up for financial success, and for most, that begins with savings. Whether the end goal is creating a comfortable nest egg for retirement or building up an emergency fund for when unexpected financial needs arise, saving is a critical aspect of feeling like you are on stable ground. Not everyone approaches saving in the same way, because not every person has the same means to set money aside, but the following tips can be implemented no matter what stage of the savings game you are in.
Find the Extra Dollars
When is the last time you checked for discounts on your cell phone or cable bill? If you’re looking for extra dollars to save, these are great places to start. You can simply give your provider a call and ask what the options are for lowering your monthly charges. The same thing can be done for auto insurance, your gym membership, or other services you pay for each month. You may not be able to negotiate interest rates on your debt, but paying them off or consolidating them into a single loan is a way to save a significant amount over time. In addition, if you’ve recently received a raise or know one is on the horizon, pretend like it didn’t happen. The extra dollars in your paycheck can be siphoned off into your employer’s retirement plan or a savings account without it impacting your cash flow each pay period.
One of the smartest things to do when you’re trying to build up your savings is to set everything on autopilot. Saving for retirement is made simple when you have access to a plan through work since the only way to contribute is through paycheck deferrals. You can achieve the same simplicity by setting up a direct deposit to a savings account from your paycheck. Automating savings allows you to pay yourself first – one of the foundations of financial well-being. To ensure you don’t pay unnecessary fees for being late on loans, credit cards, or other bills, establishing automatic payments that are sent out shortly after you get paid is another smart way save.
Know Your Savings Options
Savers have several options when it comes to the types of accounts they can use for setting money aside. For short-term financial objectives, like an emergency fund or a major purchase in the near future, a conventional savings account with a bank or credit union is often the easiest choice. However, in today’s digital age, a handful of savings options available online are rising in popularity. Online savings accounts offer a higher interest rate than brick-and-mortar banks, and most do not impose any fees for transferring money to or from. Savers can also utilize mobile and desktop applications that help make putting money aside effortless. If the goal is long-term savings, there are a variety of low-cost investment accounts, retirement accounts, and certificates of deposit that do not require a large deposit upfront. Instead, you can decide what amount works best for your budget on a monthly basis and start saving that way.
Building a habit of savings often feels more like a chore than an enjoyable activity, but once you start seeing your balance rise, you know you’re on your way to financial success. Start by finding extra dollars you can spare each month, and take the next step to automate that amount into a savings account that works best for your specific goals.