With Canadians and people around the world spending more than ever, the practice of saving money has just about become a lost art. Many of us now depend on having some type of credit available to pay for our travel, unexpected repair bills and even our daily habits. Unlike the previous generation that made some effort to have money set aside for a rainy day, our generation (myself included) has not done a very good job.
But where can you find any extra money to save?
Most of us are already running pretty tight budgets already, and it might just about seem impossible to find any extra money to put away. It can be hard as well to delay gratification and set aside some money for a time in the future, whether it be for retirement, your children’s education, or that trip you are taking as a family next yet. But it isn’t as hard as you would think, and if I can do it, I bet you can too.
Five Tips to Put Money into Your Savings Account this Year
- Pay off your DebtThis one might seem obvious and chances are you have read it in just about every financial book in the last twenty years. But this one is a bit magical in some respects, so let’s look at a quick example:
Imagine that you have a credit card with a $10,000 balance on it. This card has a 20% annual interest rate, and you just make the minimum monthly payments. If you could make an extra $1,000 payment on your card, you would save $200 in interest payments over the course of a year. Don’t have $1,000 ? Well, $100 would save you $20 over the course of the year.
You could use the money that you would have paid for interest to easily increase your savings account balance.
- Spend Wisely
Controlling how you spend your money is another way to find some money to save. Unlike other financial books, I am not asking you to give up your lifestyle or the things that you love: instead of giving things up, just be smarter where you spend your money. By making your money work as hard as possible for you, there will be opportunities to have a little extra sitting around that can be invested in your savings account.For example: Imagine that you go to your favorite coffee shop each morning for a coffee on the way to work and spend $3 on it. For most of us, we would be visiting a big chain, and they would have ground coffee for sale. You can purchase a bag or tin of it for somewhere between $6 and $12 which would make you many pots of coffee.
In my case, I love Robin’s Donuts coffee, and I buy a tin for $7. I then use a Keurig coffee maker, and a reusable coffee pod to turn that tin of coffee into 40 cups that I make at home. Total Savings for me (at $2 a cup of coffee) is $73 saved every month. Save that much money each month over the course of a year, and that is just about $900 per year I can put in my savings account.
- Save with your Vehicle
Most of us depend on our vehicle to get to work every day. In most cases, we travel alone and spend a lot on gas. In our case, my wife would drive to work five days a week, and we would spend over $100 per week on fuel. Our minivan certainly is not the most fuel efficient vehicle on the road, and we saw an opportunity to save a bit of money in this area.One of the first options that we considered was to buy a car. Now it might not seem like spending money would save money, but when you consider that our fuel use dropped down to just $20 per week, you can see the savings immediately. There are plenty of options as to whether or not to go with a new or used vehicle, but just remember that we are looking to save money, not spend more over the long term.
The second option that fell in our lap was to car pool with others. In our case, we drive another person to their job in the morning for an extra $40 in our pocket each month. While driving everyone might not seem as convenient, by taking a passenger or two can reduce or even eliminate your fuel costs each month.
Are there other ways to save with your vehicle? You bet. If you have some good ones, share them below.
- Save with Pre-Authorized Payments
When it comes to saving, sometimes the actual act of putting the money away can be painful. Many people view stockpiling the money as a loss in terms of what they could buy, and because of that, they don’t save. There are other excuses as well that do come up all of the time, and for that reason, many people don’t have savings.But if you are in a situation where you get regular cheques or deposits into your bank account each month, you have the opportunity to save automatically with pre-authorized payments. Basically, you would pick specific days where the money would be moved out of your account to your savings account automatically. This is the method usually recommended to people saving for retirement as it makes savings easy.
The key here is not so much the amount, but rather the fact that you are making a commitment to save regularly. Provided you don’t touch your savings account, it will grow month after month without you even having to think about it.
- Save your Loose ChangeWhile we tend to use cash a lot less than we used to, spare change tends to still accumulate in our pockets and our purses. By setting aside your change each day and depositing it once per month in the bank might not seem like you would be able to save up a lot of money, you would be surprised at how quickly it can add up.
Not only does it make it a little easier to carry your wallet around, it can become a very effective way to save some money.
While I have only highlighted five easy ways to increase your savings account balance, there are many more ways available to you. What is important is that you do make an effort to save some money on a regular basis to ensure that you will be able to roll with the punches when unexpected repairs crop up, have the money you need to treat yourself to a vacation, and have money set aside for your child’s education.
Feel free to share some of the things that you do to increase the balance of your savings account below – we would be happy to hear them!
Topics #money #savings