One of the best ways to save money safely and without risk is to put your money into an online savings account, so that money can work for you. However, there are several things you can do, whether around the house or changing your habits, to save money. Here are 6 simple, yet effective money saving tips to help you reach your goals faster.
If saving money is not your strong suit, you may find out that working with a financial advisor to help develop a savings plan a good idea.
1. Start small to grow your savings.
One of the main excuses I’ve heard people make is that they don’t make that much money in order to save. However, one thing you have to realize is that it’s never ‘too little’ to save money. The secret to saving money and growing it is to start small and save regularly. It doesn’t really matter how little you save, you just have to start now. For example, if you save as little as $25 a week, you will have $1300 at the end of the year.
If you have little money to save, then try Digit. Digit, one of the best apps for saving money, finds extra money in your budget and save that money for you automatically.
2. Round up your savings/save spare change.
Some investing apps, like Acorns, rounds up your spending to the nearest dollar every time you make a credit card purchase and invest the difference in index fund and ETFs. For example, if you buy a cup of coffee for $3.50, your account will be debited with $4 and Acorns will save and invest the 50 cents for you. This is one of the best money saving tips as far as making savings and investing almost painless for you.
3. Save on water and electricity.
If you’re looking for ways to save money on electricity and water bills around the house, then consider switching to energy efficient LED light bulbs and a water efficient shower head.
Other ways to save on these bills is to unplug or turn off the lights and appliances like computers, TV, washing machine when they’re not in use.
4. Set up an online savings account.
To reach your savings goal faster, open an online savings account. Online savings accounts offer a higher interest rate, which then compounds on the interest. For example, CIT Bank now offers 2.45 % interest, which is 25 times better than what a traditional savings accounts are offering. Find out more about CIT Bank Savings Account.
5. Automate your savings.
If you have a job, transfer a portion of your paycheck directly into your savings account. The way to do this is to ask your employer to set it up for you. So every time you get paid, some of that money goes to your savings account with no effort on your part. This is by far one of the easiest money saving tips to implement. For more information, read: The Automatic Millionaire. In this book, the author, David Bach, explains how he reaches 7 figures by automating everything in his life, including automating his money from his checking account to his savings account.
6. Saving money for emergencies.
Life has its ups and downs. You never know when something unfortunate might happen, like losing your job, your car needs a major repair, or you need to purchase a fridge. So, it’s important to have some money aside just for these emergencies. A rule of thumb is to have at least 6 months of expenses in this fund.
Also, this ’emergency fun’ should be separate from your regular savings accounts and your day to day money. Money in this fund should only be used for emergencies only. So set up a separate high interest savings account for your emergency fund.
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Working With The Right Financial Advisor.
You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.