How to Save More Money
Have you have been considering how to save more money, and finding that your attempts to get on top of your finances have been met with challenges? You might find that you have been able to save a small amount of money regularly, but you are looking to increase the amount that you are putting away. Whether you struggle to save at all, or you are simply looking to boost your contributions to your savings account, there are a few tips we will be discussing today that may assist you in reaching your financial goals.
When life takes an unexpected turn, and an expense arises that you didn’t plan for, it can result in a drain on your savings and lengthen the duration of time to reach your goal. Planning in advance for unpredictable events with a savings account dedicated to covering emergency expenses is one strategy that you might find helpful. Before committing to a larger savings goal, perhaps consider a reasonable amount of savings that can act as a buffer when needed.
Perhaps you receive an electricity bill that is higher than you were expecting or need repairs completed on your car. It could be a trip to the dentist, or a vet bill when a pet becomes unwell. Whatever life throws at you, knowing that you have a little extra cash available to cover these types of costs can be enormously reassuring.
Assuming that you have worked out a reasonable budget, and chosen a regular savings goal that fits in with your income and expenses, automating this process can be a convenient option. Most online banking platforms will allow you to set up recurring transfers to occur automatically at a specific timeframe that you decide. You could choose weekly, fortnightly, monthly. Perhaps you might opt for the day that follows your pay from your employer being deposited into your account, to ensure that the funds are available.
This setup can allow you to accumulate savings without you needing to physically log in to your banking platform and complete the transfer. It also may be helpful in keeping you on budget, as your savings are deducted from your pay almost immediately, and you can see what’s left in your primary account for spending until the next pay cycle.
Boost your savings
There are two ways to boost your savings – reduce your expenses, or increase your income. While this may sound simplistic, either can be effective at increasing your expendable income. Looking carefully at recurring expenses and identifying ways to reduce these can be a good place to start. Can you negotiate better rates with service providers? Get quotes from competitors and ask your current provider to price match? Are there any expenses that you no longer need and could cancel, or could you reduce your incidental expenses when you are out and about during the week?
Alternatively, could you work extra hours, pick up odd jobs here and there, sell unwanted or unused items, or start up a side business for a little extra cash? Finding a way to bring in a little extra income can also be a strategy for boosting your savings account balance. Deciding whether you reduce expenses, or increase income, or both will depend on your individual circumstances and capabilities. Even starting small and saving an extra $50 a month can make a difference long term.
The best savings plan is the one that you can maintain in the long run, and that you feel comfortable with. A plan that is too restrictive can be challenging, and a plan that results in a savings outcome that is too small can be less than desirable. Striking the right balance between the two so that the end result is positive, and the process enjoyable, can be a good strategy to adopt.
For more information and resources on reaching your savings goals check out our budgeting blogs.