Techniques to Improve Your Savings in a Few Easy Steps

ElitePersonalFinance
Last Update: February 12, 2021 Save Money

Do you cringe every time you check your savings account balance? If yes, you are not alone. Most people have confessed to being unsatisfactory in handling their own savings accounts and funds. Maybe we should revisit the purpose of savings funds before I tell you how to improve your savings.

Your savings account is your emergency funds account. You do not have to have excess money to open a savings account; you need to worry about the future. Have you ever thought of what will happen when you get fired today? How long will it take you to find another job and adjust to it? And how will you survive until then? I am not suggesting by any way that savings are intended to bail you out when you in trouble, but it is good to think of when you really want to save.

So let me tell you how you will improve your savings.

Access Your Accounts and Find Where Your Money is Going

The first wake up call to better savings, whether your retirement benefits or saving for investment, is self-awareness. This is where I will tell you, if you store money in your bank “Savings” account and withdraw at the end of the month, you are not really saving.

Lack of self-awareness is known to be the most significant barrier to improving your savings.

So what should you do to become self-aware? Good question though it sounds a little rhetorical to me. It is like asking, “how should I know when I am not sleeping?” The answer here is simple; bring you to awareness by challenging yourself with a few questions; what am I saving for? For how long will I be saving?

Knock out Unnecessary Spending

This starts with you drawing a budget. Despite how intimidating this may sound, your budgets help you keep your expenses on the side.

Now that your budget is drawn, it is time to cut off any overhead spending. This is the only way to carve out your ability to save consistently. Most people misunderstand the idea of cutting down your expenditure. I do not mean you start walking to the office instead of fueling your car or taking a train. Cutting down expenses is a matter of setting priorities. Why don’t you bring your lunch from home rather than eating out? Why don’t you pay by cash instead of throwing a few bucks every time you spend using your credit card? This can be a little tricky initially, but once you’ve got used to it, you will realize you’ve saved a lot. And by “saving” I do not mean the 20% discount you were granted at the cloth store. That’s not saving.

Set Your Savings Goal

Unless saving is your hobby, which obviously isn’t, you got to have a goal to save. I mean, what do you want to achieve at the end of your savings? Savings are sacrifices, so the best question to ask yourself is, what am I sacrificing for? If you cannot answer this question, I suggest you go to your bank, transfer everything from your “savings” account to your checking account and close your account.

You cannot get anywhere if you do not have a goal in mind. You are saving for a new house is motivating enough because you have a bigger vision in mind. Another thing your plan will guide you into is how much you save per day, per week.

Start Your Savings

Is it your payday? How about you make a blind move and save some cash? It sounds like a terrible idea but trusts me. It is an excellent idea. Tax refunds are also a great way to jump-start your savings account.

I am suggesting you jump start your savings account because there is a high probability you will not save anything at the end of the month if you haven’t saved anything throughout the month. You can automate your paycheck so that a certain percentage is saved before you even get to it. This way, you will budget for what is left.

Direct more cash into your savings accounts from your side hassle. If you have a part-time job that gives you a few bucks every day or every week, I suggest you direct a portion of this income into your savings account too.

Give Yourself Regular Checks

Statistics from the American Institute of CPAs indicate that only 17% of young adults check their accounts daily, and only 4 out of every 10 adults check their account balance.

As much as you are dealing with your money, it would help if you held yourself accountable. Check your statements and compare them with your budget.  Then you will get to know where you can spend more from your budget. In short, I mean being conscious of your budget and expenses. If you have a budget of $100 for gas for the month and you’ve spent $150, only two things are possible. It’s either you underestimated during budgeting, or you thought it wise to do a couple of rounds in the neighborhood to impress somebody.

But whether you underestimated your budget or misused your gas, you can only tell from your bank statements. When you overspend, it jeopardizes your ability to maintain and improve your savings.

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