Top Ways to Make Your Money and Savings Grow
Everyone wants to save money. Whether you’re planning for a grand European vacation, buying that dream house, saving for your kid’s education, or simply dreaming for your comfortable retirement, we need to allocate a portion of our money to realize all these dreams.
And yet, most of us struggle with saving our money despite knowing the fact that we need to save. How can we establish the habit of saving? The founder of Money Talks News Stacy Johnson shared some tips to help your savings grow faster.
Pay Yourself First
The main reason why we work is to earn money. Our salary then will be used to support our lifestyle in paying our bills, debts, and responsibilities. But for how long? Would you want to keep working until you get old just paying your bills? Absolutely not, right? That’s why the financial advisors remind you to pay yourself first. According to them, you deserve to get paid since you work hard to earn that money through working.
You can do this by setting aside a portion of your money for yourself. If you’re struggling in saving for yourself, don’t hesitate to ask your employer to transfer a portion of your money to your savings or retirement account before giving your paycheck.
This automated payroll deduction will help you build the habit of saving and spending only what’s left. Johnson also recommends you do the same thing for any raises, cash awards, and bonuses you’ll have. Before you know it, you’ve accumulated enough savings to support your lifestyle without having to work.
Round Up Your Savings
Some bank institutions in the United States have programs that automatically limit your debit-card purchases, then any extra money will be transferred automatically to your savings account. For example, if you purchase a coffee latte that costs around $3.50, your bill will be rounded up to $4, the extra 50 cents will be credited back to your savings account.
This may seem a paltry amount for you, but it’ll cost you an astounding $182.50 in a year. This program prevents you from making impulsive purchases while you go to the mall or making a purchase online. So if you haven’t already, Johnson recommends you go to the nearest bank and have your savings roundup.
Pay In Cash A Much As Possible
Most people prefer paying in installments since they thought they can afford to pay a little amount every month instead of accumulating the lump sum to buy something. While this may be true, Johnson says most people don’t realize they’re actually spending more money than saving it. Why? It’s because of the interest rates.
The interest rates accumulated for a year or two will hurt your pockets and savings. Aside from that, you’re forced to spend your money by paying for something you don’t necessarily need instead of allocating it for a bigger purpose like your savings account. The same is also true if you try purchasing things using your credit cards. What’s worse? You would get penalty fees if you missed paying on time!
Buy Cheaper Deals
Instead of buying branded products, try to look for a cheaper, generic alternative which also features the same quality as the branded ones. Johnson says it’s not cost-effective if you choose to buy a branded diaper or kitchenware that cost $500 or more. She recommends you buy branded products on things you can invest in rather than on essential home products.
Automate Your Transfers
Consult your bank or credit lender on how to automate your transfers from your checking to your savings account. This ensures you’re saving for yourself first before you spend your money on other things.
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