Even if retirement is not looming in the near future, you are probably thinking about ways in which to increase your savings so that when retirement does arrive, you will have a nice financial cushion. Well, read on for five ways to start building your savings right now.
Know Your Finances
Your first step in building your savings is to know the exact state of your finances right now. Make a list of all your monthly income and expenses so you know for sure how much money is coming in and how much is going out on a regular basis. Then add a list of irregular expenses and “treats” in which you sometimes indulge. You might be surprised at how much you spend in these areas. This is money that you could be putting into a savings account.
Create a Budget
Your next step is to create a budget. Begin with your list of monthly income and expenses, for that is likely fairly consistent. If your expenses are more than your income or even if they are about equal, see if there are ways you can cut back. Drop some subscription services, for instance, or switch to a less expensive cable or cell phone plan. See if you can decrease utility payments by conversing water and electricity with such simple changes as taking shorter showers or unplugging electronics when you aren’t using them. The money you save can either go toward other expenses or into your savings.
Next, see if you can actually budget some money directly for your savings account. If you have extra income that usually goes toward irregular expenses and “treats,” earmark that for savings instead. You’ll be surprised at how fast it can add up.
If possible, set some savings goals to motivate you to save. Some people practice the 52-week challenge in various ways, putting a particular amount of money in a savings account every week. Some choose to increase the amount a bit each week. Others keep it the same. You can also determine that you will pass up on one or two “treats” a week and put the money in savings. Skip that latte, for instance, or eat at home when you might have gone out.
Sometimes saving is easier if you don’t have to think about it or make a deliberate choice. Many employers offer an automatic savings option that allows you to deposit a portion of each paycheck directly into a savings account. Set the amount according to your budget, and then leave it alone, and watch your savings grow.
Earn a Little Extra
Finally, you might discover that the best way to save is to earn a little extra precisely for that purpose. You might find a side hustle online, writing, transcribing, proofreading, tutoring or managing social media, for instance, and dedicate your earnings to your savings account. Indeed, you might find yourself taking the plunge into entrepreneurship, just like Cane Bay Partners YouTube. Alternately, you could search through your possessions, determine what you don’t really need and sell them on eBay or Craigslist.
With a little commitment and discipline, you may soon enjoy watching your savings account flourish.