Sometimes, being prudent with your money can seem daunting at first, but it can help give you peace of mind when you visualize an ambitious future with a new house, new baby, or an indulgent purchase. Here are 8 tips to boost your savings so you can get closer to your goal without stress or frustration getting in the way!
To help you make savings in a hurry, we’re providing you with some handy suggestions for fast-tracking your way to a hefty bank balance.
1. Learn to budget and understand your finances
Learning to budget is the first and most important tip for saving money quickly. You control your finances, and you should begin with a budget.
Before you can start saving a fixed amount of money every month, you need to grasp your cash flow. This means being conscious of all your incoming and outgoing revenues, including any repayments, monthly expenses, and savings contributions.
The following steps will help you create a budget so that you can start saving right away:
- Make sure you keep track of all your finances for 30 days. Assess your savings by comparing your monthly income to your monthly expenditures.
- Make a distinction between fixed and variable costs in your expenditures. You cannot adjust expenses, such as rent and utility bills, which are fixed costs. You can adjust your variable costs by changing your groceries, entertainment, and subscription services.
2. Get out of debt
You’ll need to clear any outstanding debts and interest rates to start saving. The longer you wait to pay off your debt, the larger it will grow. This is because interest – the fee for borrowing money – keeps accruing, even if you take a break from making payments. If you don’t pay up, the interest may consume all the money you managed to save. Applying for a debt consolidation loan is also a great way to tackle outstanding debts.
To help you pay off your debt more quickly, you might want to try the 50/30/20 budget created by US senator Elizabeth Warren when she was a Harvard bankruptcy specialist. The 50/30/20 rule offers a simplified approach to paying off debt. Here’s how it works
- Spend 50% of your money on needs, including your fixed costs such as rent and utility bills.
- Spend about 30% of your monthly income on your wants, like dining out and having an expensive streaming service.
- Aim to save 20% of your monthly salary (about Rs 500). For example, if you earn Rs 2500 after monthly taxes, that’s Rs 500 to save each month. You’ll have paid off Rs 6000 in debt in just one year.
3. Create a designated savings account
The best way to save money fast is to keep your saved money separate from your other expenses. This means setting up a designated savings account.
As a result, you won’t have to withdraw from your savings account when your daily spending outpaces your monthly income. This forces you to stick to your daily budget without giving in to temptations.
4. Automate your savings.
Consider setting up an automated transfer from your checking account to your savings account each month if you have a fixed monthly income. By setting up automatic payments for your savings, you increase the likelihood that the money will continue to accumulate and go unused in the near future.
Make saving a little easier by using Spaces to move money from your main account to Spaces automatically. Rules is an in-app feature that allows you to set up these rules. I’m kicking myself for not doing this sooner. It’s a fantastic way to set myself up for the future.
In addition, you might also want to make automatic bill payments. Most companies charge you additional fees if you don’t pay them on time, so paying before the due date helps you avoid any late fees.
5. Press “pause” on non-essentials.
It can be hard not to enjoy the luxuries of eating out, watching movies, or going on vacation. However, you can create your silver lining by re-imagining your standard of living. This is a great time to re-examine your budget and find places where you can save money by reducing non-essential expenses. Remember, though, that these sacrifices are only temporary. Slimming down your spending when can help you save money.
6. Increase your income. Take up a side hustle.
Consider taking on a side hustle to boost your monthly savings. You could work some evening shifts at a bar or restaurant after your office job, get a freelance gig, become a virtual assistant, or perhaps even take care of pets.
If you can do so, saving your side hustle earnings directly into your savings account can be very motivating. However, beware of burning out. Setting yourself an achievable and short-term savings goal might be beneficial for now. Your mental health is more important than trying to achieve any savings goal. Start by paying off your credit card debt and then reassess where you stand with your savings goals.
7. Designate a no-spend day once a month
One of the best ways to save money is to have a no-spend day once a month. This means that you don’t spend any money for one day. You can either not leave the house or only spend money on essentials. This is a great way to reset your spending habits and see where you can cut back.
Rather than spending money on fixed expenses every day of the month, choose a day where you will not pay a penny. Among the things you can do in this way is cook all your meals from what you have in the house, socialize in the park or at home, and spend a relaxing evening reading or watching.
When you’ve gotten used to it, you can increase this to two days a month or maybe even one day a week to maximize your savings.
8. Reward yourself for your savings efforts.
Cutting out life’s luxuries might not be fun, but working towards a future reward you appreciate, is. Use monthly incentives to promote your savings efforts. Alternately, you could flip this and get rewarded upfront, such as by purchasing a coffee machine to save money on coffee bought at cafés later. Investing in exercise equipment at home means saving money on gym memberships or yoga classes
Once you’re used to saving regularly, you’ll need to find a bank account where your extra money won’t get lost to fees. When looking for an account, ensure it offers a no-fee performance and a competitive interest rate to maximize your savings. If you need help constructing a savings plan, use our savings calculator.
Savings are not just for large purchases; they’re also for emergencies, rainy days, weddings, family vacations, or anything else that would add joy to your life. For some people, the ultimate goal may be retirement or an education fund for their children; but for others, it might be buying a house or starting their own business someday. Whatever your goal is – find ways to enjoy the journey!