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Three Suggestions for Growing Your Savings Account

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[Editor's Note: The following is an article from my friend Julie. Many tried and true personal finance tips are summed up here... a good way to kick-start your savings goals for the new year.]

You know the funny thing about savings accounts? If you don’t have the available funds to deposit, essentially there’s nothing to save. As many of us struggle to make ends meet, the need to save often falls to the bottom of the list of priorities. Be that as it may, having a savings account is beneficial for various reasons. It provides a nest egg for personal emergencies or for larger priced purchases. The only trouble is finding the money to put in the savings. It seems like there’s never enough to go around.

So what does one do when they want to save, but can’t find the spare change to put in an account? Get creative… and disciplined. I know, I know, more discipline!? But it’s the most effective way to build your savings and for becoming financially stable. Below are a few methods for adding to your savings account each month:

1. Cut Back on Certain Expenses

Often the easiest way to find money to invest in your savings account is to evaluate your spending habits and find efficient ways to cut back. We often spend way beyond our means and in most cases it’s on things we want, but don’t necessarily need. Below are a few ways I chose to cut back:

· Bring Your Own Lunch – I love takeout just like the next person but when I checked my bank statements, I realized that eating out at even $5 per day was costing me a total of about $100 per month. So I decided to cut back on the eating out and now only treat myself to lunch on Fridays. This meant I was spending about $25-30 per month and could put the remaining money in savings.

· Downgrade Subscription Services – Do you have cable, data plans, or other accounts that require a monthly subscription or service fee? You’ll be surprised to see how they add up over the course of 30 days. I decided to remove all premium channels from my cable, downgrade my data plan, and even switch my Netflix services from streaming and DVDs to just streaming.

· Price Comparison Shopping – Lastly, I decided that for every purchase I made (whether its car insurance, hiring a contractor, or purchasing furniture) that I would compare prices. When I was able to find savings, I would put the difference in my account.

2. Start Small

Another way to grow your savings account is to start small. We often assume that if we don’t have hundreds of dollars to put away, it’s not worth saving. However, you’d be surprised to find out how far a few dollars (or pennies) can go over time – especially if your savings account has good interest rates. Start off with even a dollar per day $30 per month. In the course of a 12 month period, you’re looking at a savings totaling $360. The following year you can up it to two dollars per day and double your savings. As you free up more money in your budget, add it to your savings account.

3. Earn Extra Income

I know you’re thinking, “Not another job!” however, there are plenty of ways that you can earn money without ever leaving the house. In fact, according to Natalie Cooper of BankingSense.com , there are a lot of different ways you can earn money during your spare time. She included:

-Become a freelance writer -Sell crafts online

-Sell unwanted items

-Offer your services on the weekend (i.e. babysitting, lawn maintenance, etc.)

Cooper also added, "As you start earning money, be sure to put it all in the savings account. It can get quite tempting to begin dipping into the new earnings, but if you've lived this long without that extra money, you won't miss it in an account."

As you start earning money, be sure to put it all in the savings account. It can get quite tempting to begin dipping into the new earnings, but if you’ve lived this long without that extra money, you won’t miss it in an account.

You hear experts discussing how much money you should be saving, and it can become very intimidating. However, if you break the bigger picture down into concepts that you can easily follow it makes saving a lot easier to do. Some of the ideas above might require a bit of practice while others will come naturally. As long as you’re saving something, you’re doing a whole lot better than you were in previous months.

Last updated on January 5, 2015.

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4 Responses to “Three Suggestions for Growing Your Savings Account”

  1. Money Beagle says:

    Small savings can add up to big numbers over time. We once did something that saved us $20 per month, and there was effort involved, and someone asked “Why bother, it’s only $20 per month” but when I pointed out that after a year that’d be $240, after two years it’s a new computer, etc. it put a different perspective on it.

  2. I think tracking expenses closely for a month to see where you’re really spending can be a great way to figure out where to save more. It was an enlightening experiment for my husband and I and we were able to isolate the most expensive line items in our budget and either reduce or eliminate them.

    Bringing a lunch to work is such a great suggestion! We take our lunches everyday and it saves us a ton over the course of the year.

  3. Kathy says:

    Small things really help and are simple to implement. When I use cash to pay for an item, I always use whole dollars. That is, if something costs $5.13 I pay for it with $6. The change from those purchases goes into our piggy bank (pink of course). Every couple of years I take the coins to the bank and deposit them into savings. Each time it adds up to nearly $300. Another thing I do is take all the one dollar bills I have in my wallet and save them til I get $100 and put them in savings. Neither is a lot but they do add up over time.

  4. Mike says:

    The best advice I was given to kickstart my savings habit was to start small and grow over time. My strategy getting started was to save on a weekly basis. That week of the year amounted to the dollar amount (eg, week 1=$1, week 25=$25, week 52=$52. Over the course of a year, you’ll see your savings grow to over $1000. It gives a person a great sense of accomplishment; that feeling will fuel more savings and returns in the future.

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