If you already started to save then that is a great move but how do you improve on that and actually increase savings amount that you already have? At the end of the day, the goal is to make improvements in life and this includes your finances. But how do you accomplish that with all the financial challenges that come your way?
Forbes recently shared an inspirational story about a teenager seems to have a lot more money saved up than most people thrice her age. Robyn Bri is an 18-year old who saved about $85,000 as she enters college. It took her 10 years of cat and dog sitting, babysitting as well as waiting tables. And the college that she is going to, she is riding on a full scholarship.
Not everyone can be like her but there are things you can look into to help you increase savings amount that you already have. Here are some of them.
Create a habit out of it
If you start to save often and do it on a regular basis, you will develop the habit of saving. When that happens, putting away money for future use becomes a lot easier. It just like breakfast in the morning. There are people who take them while others just take coffee. However, there is no denying how important that first meal of the day is. If you just start with it and do it often, you will create a habit of eating breakfast. You will be doing it first thing in the morning sometimes without having to think about it.
The same with savings, do it right and often as you can and you will create the habit of saving. You will start to do it every time you get your salary. This habit will help you increase savings amount that you already have. Doing the opposite and spending what you could have saved up threatens your future financial security.
Treat it as an expense item
This is one of the mental tips you can adapt to make sure that whatever amount you save, you do not dip back into it for unnecessary expenses. When you pay your credit card bill, student loans, and even your utilities, you send the money out and that is it. Do the same thing for your savings.
Every month, pay yourself first just like how you would pay up your bills. Then forget about the money and focus on next month’s payment. The more you do this, the more intact your funds are and, depending on the interest rate, the bigger it gets thanks to compound interest.
Do not compromise on your emergency fund
In an effort to increase savings amount you have in the bank, you might be taking money out of other accounts. One fund that could be in jeopardy with this approach is your emergency fund. If you have already reached your desired amount for your emergency fund, you can stop contributing to it for a certain time. You just have to revisit your lifestyle and budget at regular intervals to check if what you have is still sufficient.
However, taking money out to be used for non-emergency situations is not ideal. If you simply want to increase your savings fund then you should do it the right way. Taking money out of your emergency fund and into another account exposes you and puts your finances in danger. If you invest the money and an unexpected emergency happens, it might be harder to pull that investment out. You also stand to lose because some early withdrawals come with fees and penalties.
Start cutting out on useless expenses
If you want to increase savings amount that you already have, you need to cut down on expenses. You can look at unnecessary purchases you have made in the past few months and try to take them out of your budget. Bloomberg shares that a lot of people are buying stuff they do not actually need. If you continue to live like this, the time might come where you have to sell things you need to just to get by.
The hard part is determining which of your purchases you can do without. It is easy to define what needs and wants are but the dividing line is often blurred. There are wants that are justified as needs just so you can buy them. You need to start looking at your priorities in life so you can craft what is important to you. As you do this, you get a better chance of identifying your wants versus your needs.
Create firmer targets
As you aim to increase savings amount that you have, you need to have firmer financial targets. You might have started with just a desire to save money. Now that you are able to do that, you can put in actual numbers to target for your savings. This can put in more form and structure in your savings plan.
Apart from the amount, you can also start putting in dates in your timeline. It was easier to start with just a rough estimate on amounts and dates. However, as you get better with it, you need to start pinning down your targets. As you have an idea how much you can save in a given time, it is time to commit to specific numbers.
Increase savings amount by regulating credit card use
A lot of people are quick to put the blame on credit cards when they are staring at huge monthly statements. It is similar to criticizing the pizza, doughnuts, and beer for going into your stomach hiding away your six-pack abs. Just as you were the one who ate the food, it was also your decision to use the card and charge more than what you can pay for.
In reality, credit cards can help improve your finances and make budgeting a little bit easier. The problem is when you start being reckless with it and start believing you deserve all the things you can charge to it. This sense of entitlement can be your downfall. If you want a shot at increasing your savings account, you need to get a grip of how you use your credit cards.
Live below budget
This is one of those smart pieces of financial advice people readily give when asked how best to manage finances. However, as easy as it is to say it, it is a lot harder to commit to. Washingtonpost shared that penny-pinching benefits not only the country but even your spirit as well but it is a tough road to take.
Other people refer to it as being in a frugal lifestyle where they try to live below their means. It takes a lot of practice and commitment to pull off but it handsomely rewards those who stay on its path. You get to free up a good chunk of your finances which can be put somewhere else.
If you are looking to increase savings amount you already have then these tips can help you do just that. It is just a matter of having the commitment and dedication of sticking to your target amounts and time frame.