Having a savings account is a great way to be prepared for the future. Whether unexpected bills pop up or you are looking to make a large purchase, finance a house, or take your dream vacation, having the money saved up makes everything a lot easier.
Of course, it’s not always easy to continually add to your savings. Life happens, and people with lower wages or income have additional challenges in building their savings. If you’re in a financial pinch, you could also consider taking out a personal loan or short-term payday loan, such as what MaxLend offers. Be sure to shop around and see what lenders are available and what the interest rates will be on a personal loan.
Building your savings account offers you financial security and freedom, but it’s not always easy to figure out how to invest your money. Here are five tips on how you can grow your savings, no matter how much is in your bank account.
1. Look Into An Online Savings Account
Unless you are investing in physical gold coins or other tangible money items, it can feel like all your money is ethereal and just a string of digits in a computer. It’s true in a way. So why not take advantage of this and open an online savings account? Typically this type of account produces higher interest accrument for you because the fees associated with a traditional brick and mortar bank are not applicable.
Always be cautious and vet any online-only financial account before you invest in it.
2. Consider Switching to A Credit Union
Traditional banks are generally easy to access and have insurance and systems in place to safeguard your money. But they can also charge you hefty fees for basic services, and incur high overdraft penalties.
A credit union differs from a traditional bank because banks are for-profit institutions, while a credit union is a nonprofit entity. This means a credit union is more likely to offer better rates and lower service fees than a traditional bank, which is solely for profit — even at your expense.
3. Automate Your Savings
If you choose to have your paycheck deposited directly by your place of employment, you usually have an option on how that money is split up and into which accounts. For example, if you have a direct deposit set up, you can choose either a set dollar amount or a percentage of your wages to be deposited into a savings account, and the remainder into a checking account.
This gives you an easy, hassle-free way to build up your savings without having to manually deposit funds into the savings account on a periodic basis.
4. Create A Budget
Sure, it might take a bit of effort and some bookkeeping, but tracking your average spending costs can highlight potential areas to cut costs and instead transfer that money into a savings account.
One thing to investigate is automatic renewals for services, such as streaming subscriptions, software, or recurring donations. If you no longer need or want these services, or maybe your priorities have shifted and you can’t afford them, canceling automatic renewals is a great way to save money. Then you can put that extra bit of savings into your account for a later day.