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Last updated Oct. 27, 2022 by Benedict Osas
Building up your savings account is undoubtedly one of the best initiatives you can take to be financially secure and prepare yourself against unforeseen expenses. Savings works for you in case of any emergency.
But for savings to work for you, you must actively build up your savings account and make it a priority. Of course, it helps that savings add up pretty quickly, so adjusting your spending pattern and doing some other minor things will allow your savings account to build up on time.
So, if you’re looking for ways to build up your savings account, you can read through this article to discover some methods you can try to build up your savings.
Top 10 Brilliant Money-saving Tips
The top brilliant money-saving tips you can apply to save your money include:
- Plan out your meals and avoid wasting food.
- Create a budget to spend less and save more.
- Reduce unnecessary expenses, including your unused subscriptions and the early morning coffee, when you can make one for yourself.
- Collect your little change, and it will amount to something with time.
- Gift your family and loved ones thoughtful and DIY gifts instead of splurging on things they won’t appreciate as much as they did the ones you spent your time making for them.
- Wait 24 hours before making a big purchase, preventing you from buying things you don’t need.
- Shop around before making purchases, in-store or online, to compare prices.
- Pay off your debts on time to minimize the amount of interest paid over time.
- Automate your recurring bills payment to avoid late fee payments.
- Make purchase purchases instead of using a debit or credit card.
Ways To Save On A Tight Budget.
You can adopt the following tips to save money on a tight budget. It will come in handy, especially in saving for future purposes.
- It would be best if you cut down on energy and gas bills.
- You don’t need to spend so much cash on unnecessary things. Instead, only make essential purchases that are beneficial.
- Smartly reduce your grocery expenses and limit eating out, especially in expensive diners and restaurants.
- You should declutter your home and also sell unused items if you’ve got any.
- When making purchases outside, do that with cash, and avoid using credit cards. It can be tempting to overspend some money on frivolities.
What Are The 5 Tricks To Saving?
You can try out these five tricks if you want to know some of the easiest methods and tricks to stay afloat. You can bet that they’ll eventually come in handy.
Outlined below are the five tricks to saving.
- Have a savings account separate from your spending account to build up your savings.
- Make savings a priority, so you can automate your saving process and always save first and not last.
- Spend your money wisely. Avoid unnecessary and impulse spending.
- It would be best if you minimized your expenses to maximize your savings.
- Have a financial plan and goal. You can seek counsel from trusted financial advisors and experts. If you stick to this trick, you will be able to get your financial life to stay on the right track.
What Is The Secret Of Savings?
The secret of savings includes:
- Creating a savings plan.
- Living within your means.
- Avoiding spending money unnecessarily.
- Automating your savings process.
- Once you utilize these savings secrets, you can build up your savings in no time and achieve your financial goals.
How Much Is Too Much In Savings?
Having too much cash in savings is possible, although it’s not wise. It wouldn’t be a smart financial strategy because you’ll miss out on the opportunity to grow your money. This can be pretty bad because, during inflation, money loses its purchasing power.
The amount of cash that’s too much in savings will differ for every individual and household once you’ve built up your savings for emergencies and short-term goals. Anything aside, you can put into better interest-yielding investments.
19 Ways To Build Up Your Savings Account
- Keep Your Savings In A High-Yield Savings Account.
One of the major ways to build your savings account is to save your money in a high-yield savings account. High-yield savings accounts are known to have higher interest rates than traditional savings accounts.
And with little research, you will be able to find high-yield savings accounts with no extra costs such as minimum deposit, monthly fees, and balance requirements.
In this type of savings account, you can quickly transfer the money you would like to save into it and manage your savings to build up your savings with time, all from your smartphone.
- Automate Your Saving Process.
Automating your savings process is an excellent way to build up your savings account. Everything has been made much easier with technology, so you can set up systems to ensure the specific amount you want to keep in your savings account is automatically removed from your paycheck every time with no continuous effort.
The benefit you get when you automate your saving process is that you don’t need to take out time to transfer money to your savings account every time you need to save. Instead, your savings will be automatically consistent. That way; you commit to building up.
You can use numerous money management apps to automate your savings process. After setting the system up, it will run itself and all you need to do is check once in a while to know how everything is going.
- Avoid Credit Purchases.
Using credit cards has made it easy for one to make purchases even when you don’t have the cash, which will inevitably affect your savings account negatively.
So, if you’re looking for ways to build your savings account, you should avoid credit purchases. Don’t spend the money you don’t have on things you don’t need. Instead, ensure you pay for whatever it is you’re buying with the cash you’ve at hand, and it will do you good to ask about discounts.
Paying with cash will minimize impulsive spending because you’ll be stuck with making worthy purchases within your financial capabilities. That’ll help your wallet as well as your savings account.
- Get Rid Of Debts.
If you want to build your savings account, you should start paying off debts. By doing that, you can put more money into your savings account because you won’t be required to reimburse any amount with or without interest to anyone anymore.
You can start by writing down all your debts and start paying them off from the smallest amount to the largest. This will keep you energized through your debt repayment journey as you will see noticeable progress encouraging you.
Or if you’ve got certain expensive debts, you might opt to pay those first to eliminate high-interest rates and save money. You can also consolidate debts if you have multiple debts to pay them off faster.
You can try any perfect strategy to get rid of your debts and build up your savings account.
- Keep Track of Your Expenses.
Keeping track of your expenses will make it easy to know what you’re spending your money on, so you can make better financial decisions to build up your savings account.
You can track your expenses by categorizing them into needs, wants, and savings. You should also know and have a clear idea of your net income and the expenses for each category to know the portion of the money that’s going to a category.
This will help you discover your spending pattern and make necessary adjustments to ensure you’re not sacrificing your savings to spend on unnecessary things.
- Cancel Automatic Subscriptions And Membership.
Unnecessary subscriptions and memberships you join automatically remove money from your account, which amounts to something if it goes to your savings account.
Canceling your unused subscriptions and memberships is easier once you start tracking your expenses. You can figure out the subscriptions your money goes to and remove those you don’t use.
One way to keep off unnecessary subscriptions is to keep track of your free trials to can cut them off before any money leaves your account.
If you have got a gym membership you are not utilizing, you should get rid of it to leave enough money to boost your savings.
- Set Savings Goals.
To build up your savings account, you should set a savings goal that will prevent you from dipping into your savings anytime you need something.
To set a savings goal, you need to know what you’re saving for, be it retirement, a car, a dream vacation, or anything else. Also, you should know the amount of money that’s required and need to have in a savings account.
Now that you understand what you’re saving for and the amount you need to keep, you should now set a timeline. Selecting a specific timeline to reach your savings goal will give you the required push to actively work towards building your savings account. With the timeline, you have to reach your goal and decide the amount of money you need to save monthly.
- Save Your Windfall And Tax Refund.
A financial windfall is pretty useful when you’re in dire need of extra cash. But, if you’re trying to build up your savings account, don’t splurge it simply because it’s unexpected extra money.
Once you’ve been able to cater for all your essential expenses, I recommend putting a portion of any windfall you receive, be it a tax refund or work bonus, into your savings account. Doing this will make it easy for you to reach your savings goal in no time.
- Setting A Limit On Your Card
Spending money without a limit will make it difficult to achieve your financial goals or even build up savings. And this is why you should set a spending limit and stick to it.
With discipline, you will be able to set a spending limit yourself. It would be best if you did it yourself instead of having your bank or credit card issuer set lower limits for you. That can lower your credit score.
Once you come up with a realistic budget and track your expenses, it will be easier to set a spending limit for yourself.
- Don’t Spend Money On Unnecessary Things.
One of the major ways to build on savings is not spending your money on unnecessary and frivolous items. The amount of money you spend on certain things you don’t need, thinking it’s not expensive, later amounts to something different. And you could have put that money into building up your savings account over time.
You should only spend your money on things you need or will use. And you don’t need to spend your money on big brand names or luxurious items you can’t comfortably afford. You can easily get the same item from store brands at way lower prices.
In addition to this, you can search the internet for instructions and videos and get things sorted out yourself. This is for certain simple maintenance and repairs around the house or car that you simply give out money for.
- Automate Your Bills.
Another way to build up your savings account is to automate your recurring bills. Bill payment is a bit tiring and time-consuming, and if you take too much time, late payment fees are waiting to bite into your savings if you aren’t careful.
However, when you automate your bills, your recurring bills will be taken care of the minute you get your paycheck. And this will eliminate the risk of late fees and help you build up your savings.
You can authorize your bill payment to be made automatically with your debit card, credit card, or checking account. And you can set it up quickly through your bank’s online bill payment service, using your credit card or with your biller.
You can automate almost all recurring bills except a few that aren’t equipped to accept automated payments, especially local small businesses.
- Have A Budget.
To create a realistic and practical budget, you need to know your net income, and after that, track your expenses and create a plan to set a realistic spending limit for your expenses.
When you’ve got everything properly documented, you should make sure to adjust your spending patterns to stick to your budget. That’ll help you get enough money to put toward building your savings account.
You should also review your budget from time to time to ensure you’re still on the right track and make adjustments when situations warrant a change in the budget.
- Cut Down Your Utility Bills.
Electricity and gas bills can take up a significant percentage of your income if you’re not careful enough. So it would be best if you cut down on your utility bills to get more money to put into savings.
You can invest in efficient and sustainable devices like efficient thermostats. You can also switch your bulbs to energy-efficient LED bulks to minimize electricity bills.
Furthermore, check around your home to see if there’s an air gap and seal it to prevent an increase in your utility bills.
- Get A Side Hustle.
One sure way to build up your savings account is to get a side hustle to earn extra cash to keep into your savings account. There are many side hustles available, and you can choose the one you’re interested in.
You can decide to sell printables online, start a blog, start a YouTube channel or freelance any skill you’ve got, be it writing, photography, web development, and any other in your free time.
Once you decide which to pick, you can start and work hard consistently in your free time to earn money. Then, with another source of income apart from your primary source of income, you will be able to get rid of debts, cater for your expenses comfortably, and still have more than enough to put into your savings account.
- Sell All Your Unused Items.
If you notice a couple of things in your house that no one is using, you can pack up these items and sell them for money on an online marketplace to build up your savings account.
If you know the item isn’t usable, it’s better to make money from it than let it waste away and take up space in your home. You can sell unused items on eBay.
- Keep Your Savings Separate.
You should never combine your savings and spending money in the same account because you’ll be prone to spend out of your savings. Creating a savings account separate from a spending account will make it easier to achieve your savings goal in time.
And if you have a separate savings account and automate your saving process, then your savings account will build up without much effort.
- Create And Participate In Savings Challenge.
You can build up your savings account by turning saving into a game. Approaching savings in a fun way will motivate you to save consistently, and this will help you build your savings account.
Before starting a savings challenge, you should know your goal, create a visual reminder of your progress during the challenge and find an accountability partner to help keep you in check.
There are such numerous savings challenges online, like the penny savings challenge, the $5 savings challenge, 13 months saving challenge, and others that you can join.
- Educate Yourself On Personal Finance.
Financial education is essential if you want to build up your savings account. This is so you can understand what to do and what not to grow your savings. There are a lot of free resources online, and with a simple search, all the information you need will be at your fingertips.
You can also get financial books to learn more about personal finance, as well as listen to financial podcasts and read articles on finance websites and personal finance blogs to educate yourself.
- Don’t Miss Out On Credit Card Rewards.
Credit cards can be quite rewarding when used properly, as they allow you to make the most of your everyday spending. Certain credit cards can reward you with points, cash back, or miles when you make purchases with your card.
Since credit card rewards are different, If you spend a significant percentage of your money on groceries, then it will be better to opt for a credit card that rewards you with extra points or cash back for groceries expenses.
If you travel often, you can select a credit card with greater earning potential in that category. First, however, it’s best to ensure you know the perks associated with your credit card and take advantage of them.
What Is A Good Amount To Always Have In Savings?
Financial experts recommend that you should always have about six months of your regular expenses in savings. With this, you will be able to handle emergencies that come your way and unplanned expenses that arise.
What 3 Things Should You Save For?
Saving provides you with financial security and peace of mind. Three things are very important for you to save for. These arranged in no order include retirement, emergency fund, and savings to pay off debts.
Frequently Asked Questions.
How Much Does The Average Single Person Have In Savings?
Certain factors determine a person’s savings amount, but the average single person generally has $4,500 in savings.
What Should You Not Do When Saving?
When saving, you should avoid using your head to keep track of your spending and instead use an app. In addition, you should automate your saving process and put off your high-interest debts. You should also avoid not having an emergency fund if you’re saving your money in a no-access account.
Building up your savings is essential if you make savings a priority and set a saving goal. But, then, you just need to actively adopt the previously mentioned ways to help you build your savings.
And everything is made even much easy because you can now automate your savings process so that money can go into your savings account consistently without any extra effort on your part.