Why are you saving money? Are you working to bolster up your emergency fund? Buy a new car? Take a trip? Here are some (almost) painless ways to boost your savings account.
Set up saving in your budget. Decide how much you can afford to save and add it to your monthly budget (you do have a monthly budget, right?) This is your month-after-month baseline for saving. You might find this money by cutting out a major expense or by trimming small amounts off of several expenses. Eat out a little less. Make your coffee at home. Consider what’s really important to you and make your budget baseline happen.
Use “found money.” “Found” money is anything that comes your way outside your usual budget: overtime pay, bonuses, unexpected checks, birthday money, you name it. I have a friend who rebates and uses her rebate money as “found money.” This is money over and above your regular income, and when you receive it, you immediately pay it into your savings account.The temptation is always to reward yourself for your financial windfall, but resist that temptation! Put your extras into savings and watch your account grow.
Use “freed money.” This is money that somehow shakes free from your regular budget. I am an ace grocery shopper, so there are times when-as lean as my grocery budget is-I come in under budget. That “freed money” goes straight to savings as I dream of the little Mazda Miata I will someday park in my driveway. Another example: here in Florida, we budget for the heavy air-conditioner use in the summer and we budget significantly less when it’s cooler. While everyone else in the country shivered this winter, we had a slightly cooler-than-usual season. We kept out windows open more than usual and our electric bill came in under budget. Voila! Freed money!
Find more “found money.” Is there a way to earn a little extra cash? Maybe you could deliver phone books for a few weekends. Perhaps a friend needs some painting done and he’s willing to throw you some cash? You loved collecting that Polish pottery but it’s just not practical now that you have little kids and eBay beckons. Again, the temptation is to spend the money, but resist the temptation and use it to grow your savings a little more.
Go visual. Keep track of your progress. Use a spreadsheet, make a graph, try a bar chart, whatever works for you. Schedule a regular time to sit down and review your progress once a month or so. When you watch your savings increase it encourages you not only to keep saving but to find new ways to add more money to your account.
Go long. If you are saving for a very big goal which will take a long while to reach, consider putting your money into a CD. You’ll make a little more interest and your money is safe. The downside? You can’t touch it without incurring a penalty for early withdrawal. This isn’t the best place to sock your emergency savings, for obvious reasons.
You can save money! Use these strategies to help you reach your goals.