Secrets to Building Up Your Savings

7 months ago
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It seems like everything you do and everywhere you go, there’s a reason to spend money. All your hard-earned cash seems to disappear in the blink of an eye, so the thought of saving money may seem almost impossible. But when there’s a will, there’s a way. Here are some secrets to on how to stash that back-up cash away, slowly but surely.

1. Build a Budget

Building a budget is the first step towards building a savings. You need to outline your hard expenses and soft expenses and how much of your income should be allocated to each. When reviewing your soft expenses, this includes going out, shopping and getting your nails done, see what you can eliminate. This will shed light on how much you are spending on the different aspects of your life and it can be eye-opening. By cutting down on those nights out on the town and perhaps doing your nails at home, you can begin to put the money you used to spend on those luxuries into your savings.

2. Pick Up a Side Gig

If you have the capacity to get a side job, do it. Work for a company that allows you to make your own hours and work around your regular full-time job. You could do direct-selling with Amway or drive for a rideshare company like Lyft. Your regular full-time job’s income can pay for your current expenses while a side income could go directly into your savings.

3. Use a Cash Rewards Credit Card

Instead of using your debit card, try using a credit card with cash rewards benefits. Make money while you spend money with a card like the Citi Double Cash Card. You earn 1% cash back on all purchases and when you pay off your credit card statement, you earn another 1% on those purchases. Then, you can transfer those cash rewards directly to your savings account.

4. Put More into the 401k

If you’re annual income straddles the border of a higher tax bracket and lower tax bracket, try to put more money into your 401k. By doing this, you lower your overall income which can shift you into the lower-income tax bracket. This will likely result in a bigger tax return, so it all evens out and you get more money back and indirectly save. Additionally, if you’re employer matches a certain percentage of your 401k savings deposits, make sure you put the maximum percentage if it’s doable. It’s essentially free money that gets put into your bank, and the only cost is having to put a bit more into the 401k, which is really not even a cost but a gain.

5. Invest Your Savings

Once you’ve collected a good amount of savings, try investing a portion of it. Buying stocks or bonds can help you grow your savings at a quicker rate. Just be careful not put all your eggs in one basket and diversify your portfolio so that you can balance out any dips in the market.

6. Make Your Savings Automatic

Adjust your bank account settings so that it transfers a certain amount of money into your savings account monthly, automatically. By making it automatic, you won’t even notice the change in your bank account and you’ll begin to see the savings build.

7. Ditch the High-Cost Daily Habits

Do you get a $5 latte every morning before work from Starbucks? To put it in perspective, that’s about $100 a month and $1,200 a year. Ditch the habit and any other daily habit that’s not a necessity. Make your coffee or lunch at home and bring it to work to start saving. All the money that would be going towards luxury can now go into your savings account. And that’s a lot of money right there!

Saving isn’t the easiest task to ask of someone who easily spends money every day. But there are some changes you can make to curb spending and shift your money towards savings. Make these small adjustments and start to watch your savings grow exponentially.