Would you like to save up for a big purchase, such as a wedding or a house, or boost the amount in your emergency savings fund so you can cover any unexpected expense that might come your way? It might seem daunting at first, but it is possible to increase your savings without waiting for years and years. Here are five tips to increase your savings substantially and quickly.
1. Cut Back on Your Expenses
The first tip is the most common one but it bears repeating: The more you can cut back on your expenses, the more money you can save. First, take a look at what you spend every month by reviewing your credit card and bank statements line by line. Next, be honest with yourself about which expenses are truly necessary and which can be cut (at least temporarily).
Almost all of us have at least a couple of monthly bills we can eliminate. With all of the streaming services available now, why not choose just one and cut your cable bill? This could save you at least $50 a month. Other common expenses that can be cut are barely-used gym memberships, take-out orders, and taxi or Uber rides.
2. Put Your Money into a High-Yield Savings Account
Hopefully, you already have an emergency fund. But consider opening another savings account, too. You can maximize your savings and increase your savings quickly by moving your money from your checking account or another low-interest bearing account into a high-yield savings account. The money will still be accessible for emergencies (unlike if you tie it up in the market) but you will be gaining interest. Shop around for an account with a great rate, as there are currently some that promise up to a 2% annual yield.
3. Clean Out Your Closet and Sell Old Items
Your house or apartment is likely a gold mine when it comes to valuable items you have but never use. Spend a weekend clearing out the clutter by going through your closet, your kitchen drawers, your kids’ toys, and anything else you have lying around. Gather everything together so that the following weekend you can begin to sell it. Whether you choose the old-fashioned way and host a garage sale at your home or choose to list your items online on Etsy, Craigslist or another site, selling your things is a surefire way to increase your savings quickly.
4. Increase Your 401(k) Contributions and Take Advantage of Your Employer Match
If you are not already contributing the full annual amount to your 401(k), start now. It might sound counterintuitive that contributing more money from your paycheck will end up increasing your savings, but it will. Not only will your savings for retirement increase, but your 401(k) will likely grow over time as the market grows, increasing your savings without you even having to work for it.
If your employer offers a 401(k) match, take full advantage of that. This is essentially “free” money and something not very many workplaces still offer, so if yours does, take advantage of this benefit and watch your savings grow.
5. Earn Cash-Back From Credit Card Use
If you are in credit card debt, this last tip is not for you. If that is the case, you are better of paying off your debt yourself or reaching out to a debt relief company to help you do so, either through debt consolidation, credit card consolidation or another plan.
However, once you are debt-free, using your credit card for purchases (and paying that credit card back, in full, every month) can increase your savings by giving you cash-back rewards or points. For every purchase you make, you can earn cash-back or points, depending on your card, and can use those points for future travel or purchases, thereby decreasing the amount you need to spend and increasing your savings.
Follow These Steps and Watch Your Savings Grow
The more of these tips you follow the more your savings will increase. Hopefully, you found these helpful and are well on your way to boosting the amount in your emergency savings fund, your dream home fund or anything else you are saving for.