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Are you looking to grow your savings account?
Many people wish to become financially secure. Whether you have a savings account or are looking to start one, making regular deposits into your account will have you well on your way to financial independence.
But how do you know where to start? What do you need to be doing to ensure that you maximize your savings potential?
Fortunately, we’ve put together some finance tips that will help you advance your personal financial standing and get where you want to be.
Keep on reading to learn more!
Make a Budget
You might have heard this statement more than once, but it bears repeating. While regulating your spending might not sound like the most exciting activity, it actually serves you well long-term and will give you peace of mind.
So, how do you create a budget?
First, take stock of your monthly earnings, including what you make post-taxes and any other tips or sources of income you have. Then, figure out what necessary monthly expenses you have. For most people, this encompasses a monthly rent or house payment, utility bills, food, and any other fees you simply can’t live without.
Make sure your current income gives you enough leeway to pay for all of your necessities.
Now, look at the leftover money. Depending on your income or situation, this might consist of hundreds or thousands of dollars. Start making brackets. How much do you want to put away for an emergency, retirement, or a big expense every month? How much do you want to keep in your pocket?
Make a detailed budget of how you intend to spend your entire paycheck, leaving enough for you to add to your savings account.
Monitor Your Net Worth
Not everyone thinks about their net worth. Yet, taking a periodic look at your net worth will help give you an accurate view of your overall financial standing.
Your net worth consists of the total value of your assets minus your debts. So, if you $3,000 in the bank, plus a home worth $100,000, and your debts equal $20,000, your net worth is $83,000.
The great thing about savings is that your net worth should appreciate over time. So, if you’re consistently depositing money into your savings account, you should see your net worth go up.
Cut Your Spending
Put frankly, the more you reduce your spending the more you can save.
Even though you might want to have the ability to purchase things now, the truth is, every dollar you save is a step towards strong financial standing. Think of it as investing in your future, and shave your extraneous purchases down as much as possible.
Define Your Savings Goals
Do you have trouble imagining yourself staying motivated enough to make consistent deposits?
Get in the habit by using your savings account as a pathway to achieving your dreams. Think of something you’d like to accomplish or do. Want to save for that amazing vacation? Start putting some money away. Want a new house or car? Make your deposits.
Don’t Forget Retirement
It might seem easier to focus on shorter term savings items, especially if you’re young and retirement feels a long way off. Here’s the truth, though: the sooner you start saving for retirement, the more quickly you can retire.
As a general rule, you should aim to save at least 15% of your pre-tax income.
Because of this, you don’t want to wait until you’re older to start saving for bigger life events. Begin now, and you won’t regret it.
Automate Your Savings
Want to make sure you’ll remember to add to your savings account?
Fortunately, many financial institutions give you the option to automatically withdraw money from your account on a regular basis. When using this feature, you need to make sure that you have enough in your account for the periodic withdrawal, or you’ll risk over-drafting it. Still, it’s helpful for those who would rather not constantly think about their savings account.
Review Your Subscriptions
Do you know what’s likely sucking money out of your account month after month? Subscriptions.
In our digital world, it’s not uncommon for people to have multiple subscriptions to services such as Hulu, Netflix, or Spotify. If you do, review your subscriptions and shave them down to just the ones you absolutely want. Try not to have more than one subscription in the same entertainment field. For instance, if you have both Netflix and Hulu, think about getting rid of your subscription to one.
Tackle Your Debt
Want to know one of our best financial tips? If you have outstanding debt, you should make sure that you factor paying it off into your monthly budget.
You can attempt this in several ways, but many people prefer the snowball method, with which you attack your smallest debts first and then work up to your larger ones. This gets you in the habit of paying off your debt without making it too daunting.
Once your debts are paid off, you can concentrate more on saving, and your net worth will increase.
Understand Interest
Do you know the interest at which your assets appreciate?
Here’s the best part of saving: interest helps you out. When you save, interest rates add to your earnings. This will accelerate the growth of your net worth.
Start Today
Have you been putting off savings because you think you can’t afford it?
If so, consider starting today. Even if you can’t save 15% of your current income, every bit of your savings will pile up in the long run and create a nice amount of cash. No matter what you can set aside, do so.
Ready to open a savings account? Visit Farmersbankidaho.com for more details!
Get a Job with 401(k) Benefits
If you’re one of the millions of people around the world looking for a job right now, see if any of your potential employers offer 401(k).
401(k) plans allow you to put some of your pre-tax income into savings. In some cases, employers will even match your 401(k) contributions.
Ready to Save with More Finance Tips?
Now that you know our finance tips for increasing your savings, you’re ready to start working on your financial security!
Finances are an important aspect of everyone’s lives. If you follow the advice above and learn to save your money, you’ll be well on your way to a financially successful future.
Want more money advice? Check out some more of our articles!
