Building up a savings account is something that most people desire, but aren’t quite sure how to accomplish. With more and more American families tightening the belt and living paycheck to paycheck, the idea of establishing and growing a savings account seems like a pipe dream.
However, there are some simple strategies that you can employ that will help you to not only start a savings account at your New Bedford credit union, but to build it up as well. If your New Year’s resolution was to make better financial decisions and start putting money away into a savings account, these tips can help get you started.
Tip #1 – Pay Your Savings Account First
Money management gurus the world over first teach their students that they need to think about their savings account as another bill. While no one wants another must-pay bill each month, this concept is sound. When making out your budget each month, include $25, $50, $100 or more as your “Savings Bill” and pay it directly to your savings account at your New Bedford credit union. The money will build up slowly, but it will add up over time, helping you to save without sacrificing too much from your monthly budget.
Tip #2 – Keep Paying Installment Payments to Yourself
Done paying off a car, college loan or home equity loan? Keep making those payments each month into your savings account. That $200, $400 or $600 monthly payment will add up quickly and, because you have already been making that payment for so long within your monthly budget, you won’t be “losing” anything each month beyond what you were already investing. In the end, you will “gain” much more – a savings account full of money for your future or as an emergency fund for a rainy day.
Tip #3 – Collect Spare Change
A kid on a mission to find spare change around the house can quickly add up the funds it takes to buy a candy bar, treat from the ice cream truck or tiny toy at the store. Spare change adds up and because we don’t really think about it too much, it isn’t a sacrifice from our daily or monthly budget. Collect your spare change from your pockets, purse, car or anywhere else you throw it throughout the course of a day. Put it into a jar and then deposit it at your New Bedford credit union into your savings account at the end of each month. You might be surprised to see how much you end up depositing!
Tip #4 – Payroll Deductions
Another great money management tool is to force yourself into making a deposit into your savings account by having your employer deposit a fixed amount from your paycheck on your behalf. Not all employers have the ability to offer this service, but it is worth a trip down to Human Resources or Payroll to find out if it is possible. Speak with your New Bedford credit union representative about payroll deduction deposits and other methods available to help you increase your savings.
Tip #5 – Quit Something
Is there something you do that costs a lot of money each month? Have you been wanting to quit, but just didn’t have something to encourage you? How about coffee, soda or smoking? All bad habits that lead to bad health side effects, but also habits that can cost you $5-10 or more each day, depending on how much you consume. That $5-10 a day can really add up, bringing you as much as $150-300 a month in savings account deposits. Instead of paying for your habit, put the same amount of money you would spend each day and then deposit it in your savings account at the end of the month – and watch your money grow!
Tip #6 – Pay More Than the Minimum
If you have credit cards, make sure to pay more than just the basic minimum each month to avoid paying more interest and get rid of that debt much faster. Once you are finished paying off that credit card, put it away as an emergency source and pay the money that you would be spending on monthly budget payments into your savings account instead. This type of money management technique will help get you out of debt and assist in building a savings account that you can use for unexpected purchases or emergencies instead of incurring more debt by using a credit card in the future.
Tip #7 – Pay Them Off in Full
This is the absolute best way to handle credit card debt. Pay it off in full each month whenever possible. Don’t allow that debt to ride on your credit card for months – or years! – on end. Pay it off to avoid paying interest charges on the items you have purchased. In the future, charge only what you know you can pay off in the next month in your monthly budget. Again, put any money that you have saved on interest into your New Bedford credit union savings account.
Tip #8 – Pack Your Lunch
It sound so simple, doesn’t it? Packing your lunch and bringing it to work each day instead of going out to eat can save you $5-10 a day. Even if you only brought your lunch once or twice each week, you could save $10-20 a week. All that money could be put directly into your savings account where it could start building up your reserves and earning you interest. By the end of the month you could have $40-80 in your savings that didn’t really cost you anything beyond taking the time to make a sandwich or salad and throw it into a bag.
Tip #9 – Learn to Keep Your Savings
Once you start building up a savings account it is really easy to start thinking about all that money and the things you could do with it. Rather than going on a spending spree or watching it whittle away with mindless purchases throughout the month, start imposing “rules” on yourself that will help you keep your savings in your account where it belongs. For big purchases, use the “two week” rule. Want to replace an old vacuum or splurge on a spa day? Give yourself two weeks to think about if you really absolutely need to make that purchase or if you can fit it instead into your monthly budget. Find something that works for you that will help you keep your money safe and sound in your savings account.
Tip #10 – Start Saving TODAY!
Don’t wait for tomorrow, next week or next month. As you can see by the daily, weekly and monthly examples given above, you can start saving money today without having to change much in your monthly budget or daily schedule. Start by collecting change, then make changes to your habits and find new ways to start saving that aren’t even on this list. Before you know it you will have built up a tidy savings account at your New Bedford credit union and will be on your way to living a debt-free life with money management skills you never thought you would be able to possess!