This is a guest post.
Most people think about saving their money, but few know how to start. If you’re tired of being broke and you’re ready to improve your personal finances, make saving a priority. Even if you can’t save a lot each month, putting aside a little each paycheck can quickly grow your savings. This can provide extra cash for recreation, debt elimination and perhaps a family vacation.
What if you’re a parent and don’t have a lot of disposable income. In all likelihood, you have more disposable cash than you realize. Change how you manage money and you can grow your savings.
Here are six tips to help you set up a personal savings account.
1. Learn how to choose a credit card. No one is born knowing how to choose a credit card. Selecting the right credit card can help your savings efforts considerably. Some credit cards offer cash back with every purchase. If you’re disciplined and pay your balance in full each month, you can use these types of credit cards for everyday purchases such as gas and groceries and earn cash back on your spending. The more you use your credit card, the more you can earn. Once you have earned enough to request a cash back check, deposit the money into your savings account. A few percent each month can add up.
2. Save your spare change. Place a large jar or bottle near your front door. And each day, place your spare change in this jar. It might not be obvious, since you’re just dropping change into a jar but the money will accumulate quickly. After a year, roll and take your coins to the bank. If your bank offers free coin counting, that’s even better. Stick with this method can you can easily save a few hundred dollars each year.
3. Brown bag your lunch. How much you do typically spend on lunch each week? Whether you spend $15 or $25 a week, resolve to pack your lunch and that’s even more savings. $5 a day, which is a pretty frugal lunch if you’re in a major city, adds up to $1300 a year. Put the cash that you would normally spend in a savings account each week and watch it grow. (and don’t feel like you need to brown bag every single day, splurge every so often so you don’t get burned out on cold cuts and leftovers!)
4. Utilize bank options. Perhaps your bank has a program to help you save money. Enroll in these programs and save each week – without even thinking about it. For example, some banks automatically round up your debit card purchases to the nearest dollar and deposit the surplus into savings. Plus, there’s the option of depositing a $1 from your checking into your savings each time you make a debit card purchase. These options can jump start your savings, and if you never touch this money, you can effortlessly save hundreds each year.
5. Take 10% off the top. Don’t think about savings after you’ve paid all of your bills. Most people are broke by this time. Pay yourself first (it’s a common refrain but a good one). Put cash in your savings first and you’ll build your account faster. Think of your savings account as another bill and pay it before the others.
6. Put your cash in the right place.High yield savings accounts are the answer if you’re looking to build a personal savings account. With the ability to earn a higher interest rate on your deposits, you’re able to grow your cash faster. Contact multiple banks and compare interest rates and terms. Local banks offer these types of savings accounts, but online banks typically have better rates.
A personal savings plan can prepare you for emergencies, such as a job loss or illness. Get your finances in order and take steps to build a solid financial cushion.