Whether you’re saving for a home purchase, retirement, your children’s education, a family vacation, a 1964 Chevy Impala or all of the above, saving can be daunting. But it doesn’t have to be complicated.
Are You Saving Enough?
The answer is probably “no.” In fact, there’s a 78% chance the answer is “no.” A Yahoo Finance/Marist Poll found only 22% of Americans are totally satisfied with their savings. This insight is key because it’s not measuring people against an arbitrary figure they should have saved, or even a percentage of their earnings. A strong majority of people judge themselves to not have enough savings. That’s concerning, but if you’re among that group, at least you’re in good company.
How You Can Grow Your Savings
Here are some relatively simple steps you can take to increase your savings:
Increase Your Income
We’re going to begin with two points that are obvious, but they’re so important that we shouldn’t ignore them. Some people just don’t make enough money to sustain their style of living. This means some can’t pay rent, while others just can’t go on vacation as often as they want. We’ll get into some great ways you can save more of the money you have, but for some people, the most practical answer to their financial issues is to get a higher-paying job, or a second job or source of revenue.
Spend Less
Every dollar you spend is a dollar you’re not saving. If you spend less, you can save more. It’s simple, but how do you know what to spend on and what purchases to avoid? First, you need a budget.
Make a Budget
It may be true that you spend too much. But it’s difficult to determine that if you don’t track how much you spend. Look over your credit card and debit card statements for the last three months. You might be surprised by where you spend your money. You can even use an app to track your spending.
If you spend $300 on candles every month, there’s an easy way to reduce your spending. But most of us don’t have such a glaring spending habit. But maybe you notice you ate out five times in each of the last three months. Limiting dinners out to once a week could save you $40 a month. That’s $480 per year.
Open a Savings Account
Don’t just put that $480 in your basic checking account. If you put that money in a high-interest savings account, that could make a serious difference after a few years. Savings accounts don’t allow as many withdrawals, so you’re incentivized to keep your money in there. Plus, they offer higher interest rates, so your money grows faster.
Purchase a Mutual Fund
Playing the stock market is not a good way to grow your savings. Buying and selling stocks is fine if you can afford to lose money, but stable, long-term growth is what most people need. Investing in something low risk, such as an index fund, can slowly and steadily grow your savings until retirement.
Save More With Vectra Bank
Contact a Vectra Bank professional today to learn more about saving.
