Saving money is something that most of us know is good to do, but we might not always put this into practice as often as we might like. Whether you have something specific that you want to save up for or want to start putting more money aside for a rainy day, there are lots of things that you can do to make the most of your savings and get more from your savings products. Getting better at saving money is something that can easily come with time and practice. And, when you choose the right savings products for you, putting some money aside on a regular basis and watching your savings balance grow can be even simpler. Keep reading to get some top tips on how to get better at saving your money.
Stick To A Budget
Sticking to a budget is the best way to save more money. By taking the time to go through your income and your monthly or weekly expenditures, you will have a better idea of how much disposable income you have left and how much of that you can afford to save. Once you know what your budget is and your savings are accounted for, you will be in a better position to avoid going over your spending budget each month. Setting a budget for the different things that you buy or like to do, such as a fun budget or a clothing budget, is also a good idea.
Getting into the habit of saving whenever you are paid can take some time, but you can make this easier to become your routine by always saving first. Once you have figured out how much money you can comfortably afford to put away each month, put this aside once you are paid so that it’s no longer in your main bank account and you are not tempted to spend it.
Choose The Right Savings Account
Having a separate savings account is the best way to make sure that you stay on track with saving money. This way, you can see your savings growing separately from your main bank account. And you can keep your savings and your money for everything else separate from one another, making it easier to manage your money. Furthermore, looking out for the best high interest savings account in Canada (or elsewhere more relevant for you!) can provide a good return on money you have saved away, interest gathered on your account balance is paid right back into the account, so in time you can grow your little nest egg without actually putting any money in there yourself. The other incentive from this is that the interest payment will be higher the more you save, so it gives yet another reason to be a little frugal.
The first step to getting your savings plan in place is to choose the right savings account for you. There are several different savings accounts available, but you might want to start out with a traditional savings account, as these are usually easy to set up and transfer your money into. A traditional savings account is typically a normal bank account that you can store money in. You will not usually get a debit card connected to the account, so if you need to dip into your savings, you’ll have to transfer them into your main account.
Most traditional savings accounts are easy access savings accounts, which are ideal if you are saving for a rainy day and want to be able to access your emergency fund whenever you need it.
Consider A Locked Savings Account
If you are worried about the temptation to dip into your savings more often than you would like, or for buying things that aren’t really needed, then a savings account that is locked for a certain period of time might be the best option for you. With these savings accounts, you are unable to access your cash for a certain period of time.
It’s best to divide your savings between a traditional easy access account and a locked savings account if you decide to go down this route. This way, you will always have some savings that you can easily access in case of emergency, but you won’t be able to get your hands on all the money you’ve saved. Locked savings accounts that you can’t access for a while also tend to have higher interest rates, meaning that you will earn more on the money that you’ve saved while it’s being stored in the account.
Save Smaller Amounts
Some people prefer to put a set amount of money away each month every time they are paid. On the other hand, others find that it is easier for them to save smaller amounts of money on a more regular basis. Maybe you are paid weekly, or you are self-employed so your pay schedule is a little bit erratic. If this is the case, then you may want to consider saving a percentage of the money that you earn instead. If you run a business or are self-employed and get paid different amounts of money each time, then consider adding 10% or 20% to your savings account each time you’re paid depending on what you can afford.
Another option to consider that can help boost your savings, or even be the main way that you save money, is micro-saving. Micro-saving is a type of saving that involves putting very small amounts of money away at a time. It’s a good idea for you if putting a big chunk of money away into a savings account makes you feel a bit deprived and you are more likely to dip back into it. With micro-saving, there are various options to consider, including round-up tools.
Many online banking apps today now allow you to round up the cents of each payment you make and place them into a savings account or savings pot. For example, if you spend $4.50 on a coffee, 50 cents will be added to your savings account to round it up to $5. While it’s not a lot per time, when you think of all the things that you spend on that aren’t a round price, over time you can save more money than you might realize by looking after the pennies.
Set Savings Goals
Now that you have a better idea of all the different ways to save and where you can save your money, it’s a good idea to set yourself some savings goals to help keep you on track. This could be a major goal for something you are saving up for, or a smaller goal to hit each month, every six months or every year until you get there. For example, if your main goal is to save up for a down payment on a house, then you might want to break this up into smaller goals of how much you want to hit each year. This will help you stay on track as you meet your goals and continue to feel motivated to carry on saving and get to your ultimate goal.
Reduce Your Expenses
Reducing your expenses is always a good thing to do whether or not you are saving for something specific. When you reduce your expenses, you have money available that you can either use to save more or spend more on things without cutting down on spending or dipping into your savings. There are several ways that you can reduce your expenses including going through your account to cancel any subscriptions you don’t need, finding cheaper options for groceries, searching for cosmetics promo codes if you’re buying make-up, and using comparison sites to make sure that you’re getting the best prices on household utilities, broadband and insurance deals.
Whether you want to start saving or get better at saving, there are lots of things you can do to help successfully build your savings balance.