8 effective strategies to grow your savings
Money. Most of us could do with more of it. Some people need a total makeover to salvage their financial situation.
Money won’t buy you happiness or answer life’s big questions like what your purpose is, but at least you can feed your family and keep a roof over your head as you figure those out.
Most of us, unfortunately, never seem to have enough of it. In fact, according to one survey, 6 out of 10 Americans can’t afford an emergency that requires $500!
Today we discuss the top tips to save money, but before we even get there, let me backtrack a bit. Money can buy you a modicum of happiness. That is if you make about $75000 in income a year according to some studies. Beyond that your happiness levels as a result of more income start to taper off.
I’ll let you on a secret though. I don’t think it’s the money per se; it’s how you spend it. There is a popular saying that the best things in life are free or pretty cheap.
You derive more happiness when you spend on experiences than you do when you buy stuff!
Even as you use these tips to save money, invest in experiences if you want more happiness for your buck.
The memories you create will last you a lifetime…(you can thank me later 🙂 )
Money saving tips
Alright then, how do you save money?
1. Track your expenditure
You can’t save money if you have no idea what you do with your paycheck in the first place. It might sound tedious at first; recording your expenses or going through your credit card bill with a fine tooth comb, but it pays off in the end. It gives you a clearer picture of how you spend your paycheck and the areas where you can cut back.
It’s easy nowadays with apps and services like Mint etc. to keep an eye on your finances. Alternatively, use Excel, spreadsheets or pen and paper to record your transactions . The point of this step is to see where your money goes and how much you have coming in every month.
2. Cut on the big three
Housing, transportation, and food consume almost half of most people’s budgets. Finding ways to cut back on any of those three should boost your savings kitty significantly.
How do you do that? Here are some ideas:
- Move to a smaller place
- Move further from the city
- Refinance your mortgage. (You may be able to lower your monthly payments)
- Get a roommate / housemate
- Negotiate your rent
- Car share / carpool
- Limit your car financing
- Compare insurance costs
- Bike or walk to work / on your errands (it’s also good for your health!)
- Use public transportation
- Plan your meals ahead
- Make healthy choices — they’re cheaper
- Buy produce in season
- Use sales and coupons
- Waste not, want not
Check out other ways to cut down on your grocery bill
3. Earn more
Before you bring out the pitchforks, hear me out. You can’t save what you don’t have, and honestly, there is just so much you can trim from your budget without feeling the pinch. Beyond a certain point, your budget just won’t get any leaner. So what’s the next best option? Find ways to bring in some extra income. With more income you have breathing space in your budget to save.
Want some ideas?
- Consider driving for Uber, Lyft or any other ride-sharing platforms
- Become a TaskRabbit and put those extra hours and your skills to great use
- Consider teaching online
- Deliver stuff through platforms like Instacart and even UberEats
If in employment, ask for a raise. You’d be surprised by the response. The worst they can do is say no, and you live to ask another day. You also plant the seeds in your employer’s mind of a raise. Go ahead, prep for the pay negotiation conversation.
4. Pay yourself first
It’s one of the most fundamental tips to save money. It’s such a simple idea, yet so challenging to implement. There are always bills screaming at you. Rent, food, insurance etc. You end up allocating your paycheck to everything and everyone else but yourself. It begs the question then, how do you pay yourself first?
Start small. There is that proverb that a journey of a thousand miles starts with just a step.
Start with just a small amount. Set $10 aside, for example from your paycheck and send it to your savings account. You can scoff at that figure, but trust me, it adds up eventually. The point here is to build up a savings habit. Once you see the progress, you get more likely to save more.
Take advantage of one of the greatest forces in the world; compound interest!
5. Automate your savings
No list of top tips to save money is complete without this strategy. And for a good reason. Deducting the money automatically from your paycheck bypasses the lethargy and inertia on your part. And you don’t miss the money. You adapt to spending what’s left on your paycheck.
If that’s not an option, use apps like Acorns that rounds off some change from your debit card, and invests it automatically for you. Very tiny amounts of money, yet they add up fast and help you build your savings.
6. Map out your financial goals
Saving for the sake of saving is good, but it gets old first. I think as humans we are wired to always have a purpose. Create a goal for your savings. For example, you could be saving for retirement. You could also be saving for a vacation trip with your family, or even just saving to buy your kids some Christmas gifts.
Knowing what you are saving for and your financial goals makes it easy to save. Keep your financial goals simple. You can even have a one-page money plan. It’s as simple as knowing where the money comes in from, where it goes, where you want it to go and when. Boom, you are on your way to financial responsibility.
7. Leave the “Joneses” alone
Some call them the “Joneses” or the “Millers.” What you call them isn’t essential. Don’t spend money to keep up with anyone. These tips to save money serve to help you build a nest egg for yourself, or even afford an experience you’ve been planning. Spending to keep up with people beats the whole point.
“Too many people are buying things they can’t afford, with money that they don’t have… to impress people that they don’t like!”
~ Will Smith
I know it’s difficult. Social media makes it even harder. You see people’s “amazing” lives captured. Maybe they have the latest imported automobile, or they bought a new house, or you see pictures of their latest vacation. And you get that slight pang of envy.
And you want to be just like them. Don’t!
Stick to your financial plan in (6) above, be content with whatever you have as you hustle for what you want. You’ll get there eventually. Be patient and consistent with your efforts.
8. Track Your Progress
What gets measured gets improved as the saying goes. If you see some progress in your savings account, you get motivated to save even more. You get creative with your hustle.
Keep an eye on your savings figures vis-a-vis the savings goals. That way you know how well you’re utilizing these tips to save you money.
Saving doesn’t have to be a nightmare. With these top tips to save money, you can create a nest egg for yourself. The key is to start small, build the habit and expand from there. One thing that comes with some savings; peace of mind.
Now that’s priceless.
Go ahead, save a dollar right now. Let me know in the comments below your top tips to save money.
Updated Nov 2018