Many Americans have difficulty putting money away as savings, whether out of habit or not knowing how to get started. Keep (or start) growing your bank balance with these four saving habits.
Keep saving easy with automation
If you can save with little to no effort, would you? You can use automatic transfers to move money into a savings account at regular intervals to increase your savings.
Set up an automatic transfer so that your savings funnels into a different, separate account each pay period. That way, saving is an automatic priority.
This gets you accustomed to relying only on the money remaining in your primary account to use for day-to-day expenses.
Reevaluate your spending
It would help if you considered whether purchases you have made are necessary from now on into the future. Rethink how often you want these purchases compared with before.
For example, if you work at home more than in the past, you might have saved money by eating at home instead of eating out, at least a few times per week.
Dining out or shopping once or twice per week can eat away at money that could otherwise be set aside in savings.
When you go shopping, ask yourself if a purchase is necessary or if holding on to the money and saving or investing it for something you want later would be a better option.
Set clear emergency savings goals
Emergency savings is not a nice-to-have thing but a must-have. Take a moment to seriously evaluate your essential expenses and set a clear and attainable goal for an emergency fund.
Make a habit of reviewing your essential expenses regularly to see if your savings target needs to be adjusted.
A typical emergency fund guideline is to have three to six months’ worth of expenses saved.
If the thought of that amount seems daunting, begin with a smaller goal of an amount like $500 or $1,000. Chip away at the goal as best you can, even if it is only $5 at a time.
Delay big-ticket items and purchases
Make yourself wait before committing to making any expensive purchases. Apply a set waiting period before purchasing big-ticket items like electronics, furniture, and appliances.
Learning to wait can be an intelligent choice, helping you avoid impulse purchases that upset savings plans if you can set a delay period of even a few days to see if you want to purchase something, whether large or small.
If you still want to buy after the period is over, you can feel better about the decision and move forward.
You can grow your money meantime in a high-yield savings account. By depositing your money in a high-yield savings account, you can increase your money with little to no extra effort.
The annual percentage yield on this type of account can equal more than eight times the national average of just 0.06% for savings accounts.
If you are fortunate enough to save money, adopting any or all of these habits can help you hold onto your funds and prepare you for whatever the future has in store.