Even if saving has never been your thing and money is tight, the coming of a new year is an opportunity to change old financial habits. Here are some ways to become a more efficient saver.
Budgeting helps you organize your finances so you have money left over to save each month. It may seem laborious, but budgeting doesn’t have to be hard. Mobile apps cut a lot of the work and can help you track spending throughout the month.
Pay yourself first
Firmly commit to making a savings deposit monthly, even if you can only afford a small amount. Do this before paying your other bills.
If you’re not confident your resolution will stick or you want to simplify the process, automate your savings deposits. That way, a portion of your paycheck will automatically go to your savings account, or an amount you choose will be transferred from your checking to savings account each month. You won’t miss money that was never in your hands in the first place.
Make your money work harder
Compound interest is the interest paid on the interest your money earns in an account, and it allows your principal balance to grow faster. To fully benefit from compound interest, consider opening a high-yield savings account or a certificate of deposit that offers higher rates than the average savings account.
Plug up cash drains
It’s not always the big expenses that sabotage saving efforts; small expenses can add up and be a huge cash drain.
Bring in extra bucks
When trimming expenses doesn’t do the trick, the only way to create enough free cash for saving is to increase what’s coming in.