With a lot of people working hard to pay their bills, and often having no money left over for personal rewards, let alone substantial savings, putting extra money into savings can be a tough task to fulfil. However, it’s important to remember that even the tiniest amount — even if it’s $5 a month — will all eventually add up, and be better than nothing.
Here are 4 tips to get you started on a better savings path.
- Get Out of Any Debt First
There is no point planning to put money into your savings if you have a backlog of debt, no matter how small. Although any form of savings is a positive, it’s much better to use any extra money to clear debt in order to get straight with your finances and avoid paying extra due to interest charges. As soon as debt is cleared, the monthly amount you usually pay in minimum debt payments can then be a bonus for your savings pot.
If any debt is becoming serious and unmanageable, it’s paramount that you tackle your debt as well as working to defend yourself from a debt lawsuit.
2. Put a Certain Amount into Savings as Soon as You Get Paid
A lot of people neglect their savings habits because they leave it until the end of the month to see what they have left — which more often than not, may be nothing. If you’re waiting to see what you have left at the end of the month, you will increase the likelihood of overspending or believing you have more spare money than you actually do.
Decide an amount you can comfortably afford to put into your savings pot when pay day hits. Then you know the amount you have remaining is free for you to spend as you wish. Anything left at the end of the month can always be used to top up your savings pot as a bonus.
3. Open Up an Online Savings Account
Saving is much easier when it’s official, and when you can actually watch the amount grow. Opening up a savings account through your online banking not only grants you opportunity for extra interest to build — plus rewards from your bank — but it also lets you watch the savings grow while providing a visual interpretation of how well your savings are going. This increases the likelihood of you being encouraged to save more, because you can see your money building up.
4. Know What You’re Saving For
Having a goal in mind always makes saving easier. Whether it’s for a new house, a holiday or anything in the future, having a rough idea of an ideal monetary figure makes it easier to aim towards. When you can see your money building up to the figure you are aiming for, you are less likely to take money from your savings, and more likely to be encouraged and dedicated to save more.
If your intended saving habits are more for financial security, an emergency fund or for anything which might arise in the future, you may not have a specific figure in mind. However, it’s a good idea to plan for how much money you would consider a comfortable and secure amount, and aim to at least meet that sum.
