As a new year gets underway, many people have vowed to improve their financial situations by saving more. This includes contributions to retirement accounts, savings accounts, and emergency funds.
But if you haven’t actively saved money before, it may seem complicated and difficult.
It doesn’t have to be. Here are four easy-as-pie ways to boost your savings this year:
1. Separate your accounts
I used to have a savings account at the same institution as my primary checking. The accounts were linked, and it was so easy to just dip into my savings when I “needed” the money. When I moved my savings account to another financial institution (and set up a taxable investment account to serve as my emergency fund), that all changed.
Now, there’s a degree of separation. It requires extra steps and extra thought to access my savings. I think it’s better that way. You’re forced to really think about whether you’re facing an “emergency,” since you can’t just make a transfer with a single click.
2. Make automatic deposits
This is another little change that I made with my finances. Automatic investments are made to my taxable account/emergency fund once a month. My retirement account contribution is also automatically deducted from my account.
Having these automatic deductions mean that you have to plan around them. Rather than assuming that the money is there and you’ll make the deposit at some point (if you have some left over) the new assumption is that the money isn’t available to you, and you have to prioritize your other spending.
3. Regularly boost your contributions
Make it a point to increase your contributions to savings accounts regularly. Boosting your contributions when you get a raise or a promotion is a given — but you should also do it even when you’re not seeing a change in income.
Every three months, boost the amount you set aside. You can do this by adding another $50 a month to your contributions, or by upping the percentage of your income you’re saving. Decide what you’re comfortable with, make it a priority, then stick to your plan. By increasing your efforts over time, you’ll learn to make sustainable changes to your money management techniques and help your savings and retirement plans.
4. Deposit your cash-back rewards into savings
Some credit card rewards programs allow you to deposit your cash-back rewards to a bank account. If this is the case, arrange to have them deposited into your hard-to-get-to savings account.
If it’s an option, set it up so that you receive this automatic deposit whenever your cash-back rewards reach the minimum threshold. This is just one more way to automate the way you handle your savings. Hopefully, if you make use of credit card rewards, you’re doing so in a responsible manner and paying off the balance each month.
What are some of your budgeting hacks for boosting your savings?