5 Simple Strategies for Growing Your Savings
You know that you should save for a rainy day, but are you actually doing it? More importantly, are you growing that rainy day fund? With the hustle and bustle of everyday life, it can be easy to forget to put aside money or grow the savings you already have.
But, it’s not too late to put these simple strategies into action now. Watch as personal finance author Stefanie O’Connell shares five ways to help grow your savings, from contributing money to your savings at the first of the month to having a side job on the weekends.
STEFANIE: Hi everyone, personal finance author Stefanie O’Connell from stefanieoconnell.com here, sharing five simple ways to grow your savings this year.
STEFANIE: Saving is probably one of the earliest concepts we learn, starting with our very first piggy bank or allowance.
STEFANIE: We all know we should be doing it, we might even be trying, but when it actually comes to setting our money aside in savings, many of us still fall short.
STEFANIE: These five strategies can help you prioritize your savings, so that you’re able to grow your savings balance and afford the milestone money goals — like buying a home, traveling or retiring — that matter most to you.
STEFANIE: 1. Live Within Your Means
STEFANIE: It’s impossible to save money if you’re spending more than you earn each month.
STEFANIE: That’s why learning to live within your means is so important.
STEFANIE: If you want to increase your savings rate quickly, increase the gap between what you earn and what you spend each month by finding ways to reduce your recurring expenses.
STEFANIE: For example, consider cutting cable TV, reducing your utility usage, renegotiating your cellphone plan and using public transit when possible.
STEFANIE: 2. Pay Yourself First
STEFANIE: In other words, don’t wait until the end of the month to set your money aside in savings.
STEFANIE: Much like you might pay your bills, like your rent or your mortgage, at the start of each month, think of your savings contribution like a bill you pay to yourself.
STEFANIE: By making your savings contribution at the beginning of the month, you’ll be less likely to overspend elsewhere and more likely to maintain your commitment to your savings growth.
STEFANIE: 3. Automate Your Savings
STEFANIE: Instead of paying the bills each month and saving whatever’s left over, automate a transfer directly from your checking account into your savings account immediately after your paycheck lands in your account each time.
STEFANIE: When you don’t see your money sitting in your checking account, you may be less likely to think of it as part of your spending allowance, circumventing yourself in service of your savings.
STEFANIE: 4. Save an Additional Percentage of Your Income With Each Raise
STEFANIE: While you may not be able to save much when you’re just starting out in your career, you can and should increase your savings contributions as you progress in your professional career.
STEFANIE: For example, if you get a 5 percent raise this year, consider increasing the percentage of your salary that you’re saving by 1 or 2 percent, as well.
STEFANIE: 5. Consider a ‘Side Hustle’ for Additional Income
STEFANIE: Cutting back on your expenses isn’t the only way to increase the gap between your earnings and your expenses.
STEFANIE: You can also grow the income side of the equation by picking up a “side hustle,” like freelance design work, babysitting or tutoring, to help make extra money.
STEFANIE: By expanding your income, you’ll be more able to increase your savings contributions, too.
STEFANIE: For more tips on how to reach your savings goals, visit allstate.com/blog and follow me @stefanieoconnell.