Building savings should be a key focus of any good financial plan. Having savings will make you feel more financially secure and help you achieve your life goals. Savings can also provide a safety net in the event of an emergency; for example, unexpected medical expenses or a sudden loss of earnings. Luckily, there are lots of simple steps you can take to increase your savings. Small alterations to your lifestyle and spending habits can have a big impact and significantly improve your financial position. On that note, here are some simple ideas to help you boost your savings today.
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Assess your financial position
One of the first steps you should take is to assess your finances and get a realistic overview of your financial position. According to advice on moneyunder30.com, you should start by determining your net worth. You can calculate this by subtracting your liabilities (debts) from your assets. If your assets are larger than your liabilities, then you have a positive net worth; whereas, your net worth will be negative if your liabilities exceed your assets. You should try not to worry if your net worth is negative at the moment. The important point is to track your net worth and try to improve it. For instance, your net worth will increase as you pay off your mortgage and own more of your home. You can use a financial calculator to determine the value of your net worth.
Create a savings plan
Once you have an understanding of your financial position, you need to create a savings plan to help you achieve your financial goals. Start by working out how much you should be able to save each month. This can be calculated by looking at your incomings versus your outgoings. For example, if your earnings are $3,000 a month after tax and your outgoings are roughly $2,500, then you should be able to deposit $500 into a savings account each month. As a result, you would save $6,000 a year. If you need to save $8,000 by the end of the year, then you will need to look for ways to reduce your monthly outgoings, such as by spending less money on non-essentials like meals out and clothes. Create a savings plan that will guide you towards your financial goals. It is a good idea to automate savings and set up an instant transfer at the start of each month. This will mean you are less likely to go over your allocated budget or waste money on unnecessary items.
Spend less money
One of the best ways to increase your savings is by spending less money each month. Some expenses are essential i.e. rent, utilities, and food. However, most people spend a big chunk of their salary on non-essential items each month such as nights out with friends or new clothes. If you are serious about saving, then you should try to keep non-essential spending to a minimum. When you do need to make a purchase, look for ways to save extra money. For instance, a DoorDash promo code can be used to save money if you decide to treat yourself to a take-out. There is a huge variety of vouchers and coupons that can give you discounts on commodities such as food, clothing, and entertainment. Take advantage of discount codes to spend less and maximize your income.
Increase your salary
Another easy way to boost your savings is by increasing your salary. This could be as simple as asking your current employer for a raise or doing overtime at work. Alternatively, you can look for a second source of income. Starting a second job will give you extra money that you then put into savings or use to clear outstanding debt. There are also many ways in which to earn extra income online. Freelancing is a popular way to make money using the internet. Freelance platforms such as Upwork and Fiverr allow you to register and offer services such as writing or graphic design. Some other ways to make money online include blogging, tutoring, and affiliate marketing. You can also use selling platforms like eBay and Etsy to make money selling handmade goods or second-hand items. Try to deposit any extra money you earn straight into a savings account rather than increasing your spending.
Summary
Most people wish they had less debt and more money saved. Having a healthy savings account will help you feel financially secure and give you the freedom to treat yourself to large purchases such as vacations or home renovations. Savings also act as a safety net and cover you in financial emergencies; for example, if you lose your job unexpectedly. You’ll be pleased to know that they are loads of easy ways to save more money, without sacrificing your quality of life. Try some of the above suggestions to boost your savings today.
