As prices have soared on groceries, automobiles, and everything in between, you may think putting away some money to increase your savings account is out of the question. While it's true this task may be hard, it is not a mission impossible. To make sure you can save up for retirement as well as a rainy-day fund, here are some simple tips you can use to get excellent results.
Track Your Expenses
Before you can save your money, you need to know how you're spending your money month after month. To do this, start tracking each and every one of your expenses, no matter how large or small they may be. When you do, you're likely to be surprised at certain things you're spending your money on time and time again. This is especially useful regarding grocery shopping, since it's likely you may be guilty of falling victim to impulse spending here and there. Once you start breaking everything down, you're sure to find areas where you can save your money.
Figure Out Your Financial Priorities
If you have not sat down and figured out your most important financial priorities, saving money is instantly made much harder. Once you meet with your CPA to discuss how your income and expenses can mesh together in your financial future, you can start setting short-term and long-term goals, such as which retirement plans will work best for you in the coming years. As an example, your CPA may suggest that instead of putting your money into a traditional savings account, you instead opt for a certificate of deposit or IRA.
Cut Down on Eating Out
Since you lead a busy life, it becomes easier and easier to stop by nearby restaurants several times each week for lunch or dinner. Though it's convenient, it's also far more expensive than choosing to do some cooking on your own. Though grocery prices have risen dramatically, it's still much cheaper to cook your own meals. On days you go to work, choose to pack your own lunch rather than eat out. If you will do this for a month, you'll notice a substantial savings in your budget.
Limit Your Credit Card Usage
If there is one thing that will eat into your income month after month and prevent you from building up your savings, it is credit card usage. Once you begin accumulating credit card debt, you can almost kiss goodbye your dream of having a large savings account. To solve this problem, your CPA may suggest such things as canceling any memberships or subscription services you don't use regularly, examining your statements each month to look for purchases you could have done without, and only charging amounts on your cards that will allow you to pay the balance in full each month. Rather than give away your money to high interest charges, you can instead place your money in your savings account or other financial option.
Automated Transfers
If you get paid by direct deposit, take full advantage of automated transfers to build up your savings. A service offered by almost all banks nationwide, you can sign up for this service and have a designated portion of your paycheck be deposited into your savings account each payday. Since this will be done automatically, it guarantees you'll build up your savings, rather than give in to an impulse purchase that will take money out of your pocket before you even know what happened.
DIY Your Home Projects
Unless you have a major renovation that needs to be done, chances are you can DIY the project and save hundreds or thousands of dollars that can instead be used to quickly increase your savings. Once you spend money on your materials and do a quick YouTube search for how to do your project, you'll save on those high labor costs and keep more of your hard-earned money.
Refinance Your Mortgage
If you want a way to save money over the long haul, talk with your CPA about the benefits of possibly refinancing your mortgage. If you decide to do this and go from a 30-year mortgage with a variable rate to a 15-year fixed-rate mortgage, you will save thousands of dollars in interest over the course of the loan. Instead of giving that money to your lender, put it away in your IRA, savings account, or in your investments portfolio.
Create a Realistic Budget
You would be amazed at how many people live month after month without creating a budget for how they will spend their money. If you're part of this group, it's no wonder you're searching for ways to build up your savings. Whether you choose the old-fashioned pencil and paper method or decide to use one of the many budgeting apps available today, creating a realistic budget and sticking to it each month will make your financial life much easier.
Use Employer Matching Contributions to Your Advantage
If you have a 401(k) as part of your benefits package at work, make sure you contribute the maximum amount you can to it each payday. When you do and your employer matches your contributions, your savings can soar higher than you ever imagined. If you start this early enough in your working life, you can find yourself with quite a 401(k) nest egg when you retire.
Cut Down on Coffee
This one may be hard for you to do. However, if you limit the number of $8-$10 cups of coffee you're getting at the local Starbucks, you will have a surprisingly large amount of money you can put into savings each month.
In talking with your CPA, you will learn that saving money is actually much easier than you realized. From limiting your credit card purchases and the number of times you eat out to refinancing a mortgage and more, using these and other simple tips will soon create a large savings account that will give you peace of mind.