How To Save Money: Simple Tips to Build Your Savings

Do you feel like no matter how hard you try to save money, you just can’t seem to get ahead?

You may be trying to build up your savings account for an emergency fund, but something always seems to pop up, putting you right back at square one. There are many simple ways to start saving money today to help you reach your financial goals.

Today we’re diving into some helpful money-saving tips to help build up your savings and reach your goals this year.

1. Pay off your debt

To work on building up your savings, you have to first deal with that nasty four-letter word — debt!

Debt can include anything from credit card debt to student loans to car loans. Continue reading for ways you can save money and become debt free.

Always pay more than the minimum payment

When you only make the minimum payment on your account, paying off the entire balance can take forever.

This is because most of your payment goes toward the interest and not paying down your actual principal.

Even paying $50 more than the minimum a month can make a big difference in helping you pay off your debt quicker so that you can focus on your savings goals.

Spend less than you intend to each month

Unfortunately, many Americans are living paycheck to paycheck every month.

Most people find they are in debt because they tend to make impulse purchases, even if they can’t afford it.

Using cash or your debit card instead of credit cards to purchase everything helps reduce impulse buys and puts things into perspective. In turn, this can help you save money.

Studies have shown that people spend at least 15% more on everything when they purchase things using credit cards rather than cash.

To help build up your savings, try leaving your credit cards at home and buying everything in cash until your debt is paid off.

Pay off your highest interest rate first

Choosing the debt with the highest interest rate and paying it off first is recommended.

Once you can get it paid off, you can take the money you were using to pay it and use it to start paying off your next debt with the next highest interest rate.

This can help you pay off your debt quicker, allowing you to save a lot of money that was simply going towards interest.

Aggressively pay off your debt by getting a second job

You can pick up a second job if you are dead set on paying off your debt as quickly as possible and padding your bank account to focus on your savings goals.

If your schedule allows, this can be an excellent way to earn extra money toward your current debt. One thing to remember is to make sure you use the extra cash to get out of debt and not on other nonessential things.

Keep track of your spending

Sometimes all it takes to help you achieve your debt-free goal is to take a hard look at your finances and track your spending habits.

You can do this by using spreadsheets or a budgeting app. Doing this lets you see exactly where you are overspending and what areas you can cut back on.

Some common areas you can cut back on include:

• Unsubscribe from unused subscriptions.
• Cancel online streaming services.
• Cancel or reduce your cable tv plan.
• Reduce or eliminate your Amazon shopping.
• Reduce your cell phone plan.
• Cancel unused gym memberships.

2. Save money automatically

Automatic transfers are the process in which you automatically have a certain amount of money transferred into your savings account each month.

This is essentially a “set it and forget it” method, which helps make saving easy. One of the easiest ways to do this is to set up a direct deposit. This is where a portion of your monthly paycheck is taken out of your checking account and put into your savings account.*

Most institutions allow you to choose a specific dollar amount or a percentage of each paycheck to transfer into your savings.

3. Adjust your tax withholdings if necessary

Do you get a large tax refund every year? That typically means your employer is taking too much tax off your paychecks. In this case, looking into adjusting the withholdings on your paychecks is recommended.

This allows you to bring home more monthly money that you can use to boost your savings account.

4. Take advantage of your retirement account

In the long run, another way to easily save money is to utilize your retirement account. If your employer matches your 401(k) and you aren’t taking advantage of that, you essentially lose money. Simply talk to your HR department to set up an account if you don’t already have one.

It is recommended to have most of your other debt paid off and an emergency fund built up first before aggressively taking advantage of this option.

5. Save money on your car insurance

There are a few ways you can save money on your auto insurance. As prices differ between companies, it is always recommended to shop around first.

Get quotes before you purchase a car

Did you know that car insurance premiums are based on the price of the car, the average cost to repair it, the overall safety record for that type of vehicle and the likelihood it would get stolen?

When you are car shopping, it is a brilliant idea to look into how much the insurance will cost for that particular vehicle before you purchase it. This can save you a lot of money in premiums.

Increase your policy’s deductible

If you already have enough money to cover unforeseen expenses, you can choose a higher deductible on your car insurance.

Choosing a higher deductible can save you a significant amount of money each month in premiums that you can use to increase your savings.

Bundle your insurance policies

Most insurance companies offer a discount if you have two or more policies with their company. This can include a homeowners and auto policy, for example.

Some companies even offer a discount if you have two or more vehicles insured. It is best to shop around and compare costs before agreeing to bundle your policies with one insurer to ensure you get the best deal possible.

Prioritize your savings goals

Regardless if you are saving for a short-term goal, such as buying a car or going on a vacation, or a long-term goal, such as buying a home or saving for retirement, it is essential to prioritize savings.

By implementing some of the suggestions above, you can be well on your way to reaching your savings goals.