Do you wish you had more money in your savings? Here is a plan to help make the most out of your money and build your savings.
Set a Goal
Decide the minimum amount you would like to have in your savings and when would you like to have this goal achieved. Divide the total amount of your goal by the number of months or years in which you would like it achieved to give you the amount you’ll need to save each month. For example:
$5000.00 in savings in 1 year
$5000 Divided by 12 (months) = $416.67
You would have to plan to add $416.67 to your savings account every month to meet your goal.
Make a Plan
Where will the funds come from? Make a list of places you could access extra money.
- Figure out if you have extra income after your expenses. You can do that by creating a budget. For more information on creating a budget read Successful Budgeting from our Financial Education page.
- Take a look at your monthly spending and see if there are things you can cut out of your routine, such as that $5.00 latte. Review what you’re spending money on and be conscious about your purchases.
- Instead of taking your unwanted/unused clothing, furniture or household items to a thrift store, consider selling them online or at a yard sale. Every little bit counts. You can also find great deals on things if you’re willing to buy used items. Get familiar with online marketplaces or local flea markets.
- Use your talents or skills to start a business from home. It is easier than ever to sell goods and services online. Do you knit, make crafts, fix small engines or have a skill that can be monetized? There are many services and products that people would rather pay a local company or community member for. You could advertise tutoring to students, babysitting services or yard care. Heavy equipment, trailers and RVs can be rented out for a fee. There are many options for making some income on the side.
Automate Your Savings
Once you know the amount that you want to save each month and the ways that you want to get those funds, you can automate your income to deposit directly into your savings without any effort. Here’s how:
- Pay yourself out of your income – If you know that you have an extra $27.00 from your paycheck each month, you can set an automatic transfer of $27.00 to go from your checking into savings at the end of each month. You can set up re-occurring transfers online, call the help desk or visit a branch.
- Be disciplined about your spending – If you consciously remove something from your typical spending habits, calculate that amount you would normally spend and transfer that amount into savings. If you typically eat out 4 times a week and spend $40 each time, cut it back to 2 times a week and add that money to savings instead.
- Utilize tools from your financial institution – Some financial institutions have tools and programs to help you save. Here at Ascent Credit Union, we have a MyFund Savings account that deposits the leftover change from your checking account each night into your savings. For more information on MyFund+Sweeps accounts, please click here. There are other tools and programs available as well.
Building a savings account takes discipline and planning. Hopefully we have given you a few ideas on how to get started and get on a good path to saving.
For more information or questions, please contact us.