The desire to increase savings account is a common dream across US consumes but this is easier said than done. There are still some people that are reeling from the effects of the most recent Great Recession and getting a good grip on their finances is a challenge. Then there are some who are just starting out and are already crippled by their student loan payments.
There will also be discouragements but you just need to continue on and not let these hurdles keep you from your ultimate goal of setting up your finances for the future. You should not let bumps on the road keep you from strengthening your current finances in order to have a stable one down the road. One of best things to do is to increase savings in order to have more funds in your budget.
But this is easier said than done when you consider all the things you have to put in place just to squeeze out a few more dollars in your income. You might already be trying to make ends meet and coming up short every time. So the idea of setting aside an amount from what you are earning at the moment seems a little too far fetched.
What is more troubling is the fact that the Financialeducatorscouncil.org recently conducted a financial literacy survey and the results would be an equivalent of a failing grade for the 15 to 18 year olds. There is still a lot more room for improvement starting with how to be able to effectively save money and use it to reach a financial goal.
Tips to increase savings in the budget
If you are looking for ways to help you increase the amount you are putting aside for the future, here are few things you might want to consider.
- Raise your rent. Denverpost.com explains that the 11.4% increase in rent over at Colorado Springs is biggest in U.S. in March. If you are still renting or paying mortgage on your home, you would know how big of a chunk this eats away from your household budget. But this is also a great opportunity to help you save money. One thing you can do is to increase the amount that you are putting into the house every month even if your rent or mortgage did not go up. This helps you put away a specific amount every time you make a home payment.
- Check your subscriptions. To increase savings, you also need to carefully study your expenses and plug the ones that are of no use to you anymore. You need to rely on your budget for this to be able to look at your expense items. Are you still paying for a magazine subscription that seems to just be scattered around the house? You might be paying for a cable subscription that you only get to use on weekends and only for a few hours. Take a look at what you no longer need and cut those expenses so you can save the money.
- Increase your 401(k) contributions. One of the fastest ways to retire early is to increase your retirement fund allocation and that includes your 401(k) contribution. One of the best things you can do is to plan for your future and that is one of the reasons why you are saving money now. You can choose to bump up your 401(k) contribution and what this can do is that it might even increase the company match your employer is putting in. That is if you have that in your employment package. But if not then it should not stop you from increasing what you can save now for the future.
- Don’t underestimate the power of pennies. You remember when you parents gave you a small piggy bank when you were small and you tried your best to fill it up with pennies and quarters? One takeaway you can use up to your adult life is that you should never underestimate the power of loose change. Try to put some jars around the house and even a couple on your office desk. At the end of the month, empty it out and put it in an account and repeat the process. You might be surprised at how much you get out of them after a year.
- Round off savings amount. When you start to crunch numbers, you want to get as close as possible to the exact amount but when you want to save more, you can try rounding them off to the nearest higher number. This gives you a few extra dollars on top of the amount you are saving that can add up through time. You can choose to bump it up with a few dollars or higher but the point is putting in a buffer for an extra amount that you can use when you hit a tight financial spot in the future.
Where to use the money
You might be wondering that as you have been increasing savings amount for so long, you have no idea where to put the money into. This might sound odd but the reality is that there are people out there who are clueless on what to do. Here are a few suggestions to make your finances work for you.
- Secure your reserve funds. This is one of the things you need to build up so you are prepared to face any unexpected financial needs in the future. It can be as simple as a broken lightbulb at home or even oil for the car. But it can also be used to cover for your budget when you suddenly lose your job or fall ill that you no longer have income coming in for the next few months. This is also a great preventive measure to avoid debt in the future. This is because when you experience a financial emergency and you do not have backup funds, the most logical step is to borrow money.
- Add to your retirement goal. USNews.com recenlty came out with an article that explains how the long belived $1 million seed fund for retirement money should now be around $2 million. This should prompt you to intensify your savings making it a good option to put whatever amount you get to save.
- Increase your skill level. You can also invest in yourself either by learning a new skill or upgrading the one you already have. This can in turn increase your worth in the workplace and in turn increase your income as well.
- Pay down big interest debt. As you increase savings, you can also increase payment on debt accounts that carry the highest interest rate. This usually are your credit cards and other high interest loans. This relieves the financial stress you are feeling and helps you save money that you can use to invest in your future.
You want to increase savings for a lot of reasons but primarily, it is for your future rather than short term gratification. Although you should also learn to enjoy what you have now, you must have the foresight to prepare for the future and that can be planned with whatever amount you can save today.