Are you looking for ways to grow your savings? Look no further.
Many of us end up spending all we earn, and even worse, getting into debt.
The good news is that it's never too late to start saving. However, you need a strategy to get the best results from the practice. This post unpacks practical strategies you can implement today to grow your savings and your financial prosperity.
1. There's an App for That – Automated Budgeting Tools
Today’s world of technology makes financial literacy easy for everyone – all you need is a phone. Download budgeting and financial management apps like Mint or Acorns. These apps link to your bank account, giving you an overview of your spending per your budget.
These apps also invest your spare change from transactions into your savings account, helping you automate the savings process. You also have the option of investing in financial vehicles through the platform to increase the interest you earn on your money.
2. Start a Change Jar
It might sound like an amateur strategy, but a savings jar works. While Acorns banks your virtual change, you can bank your coins and smaller notes into a physical savings jar. Using a clear jar is a powerful visual, allowing you to watch your money grow.
3. Shop with a Grocery List
If you're heading to the store for groceries, write a list before you go. It's easy to overspend when you get to the grocery store. Retailers stock shelves using retail sales psychology; that's why you'll notice they change things around on the shelves periodically.
This practice forces you to walk around looking for what you need, and you're likely to buy things you didn't go to the store for initially. A grocery list keeps your spending accountable.
4. Plan Your Big Purchases
If you're purchasing anything that costs more than $500, make sure you plan the purchase well in advance.
Consumer goods like electronics and furniture go on sale at certain times of the year. Use this window of opportunity to get savings on your purchases.
5. Put the Brakes on Your Online Shopping
It's easy to sit in front of the TV browsing Amazon on your phone for hours. If you like online shopping, don't start spending on everything you find appealing.
6. Refinance Home and Auto Loans
Your mortgage and car note are probably the two single biggest expenses draining your monthly cash flow. Speak with your bank manager and find out if you qualify for refinancing your loans at a lower interest rate.
If it's been a while since you took the loan, and you're responsible for your spending, chances are your credit score is improving. Asking for a refinancing deal gives you a favourable adjustment to the APR interest charged on your mortgage and car loan.
Your credit score also affects your insurance. If you have an increased score and haven't claimed your insurance benefits, call your insurer annually and ask them to adjust your premium costs.
7. Cut the Cable
Your expenses matter to your savings. For instance, if you're paying $50 per month for cable, do you really need it in your life? If you cut the cord, it could save you $600 per month.
Streaming services are vastly cheaper than cable TV, and your Amazon and Netflix account will cost less than half of your monthly cable subscription – cut the cord and saves hundreds of dollars per year.
You also have the option of bundling your cable and internet services, saving you up to $1,000 per year in expenses. What could you do with an extra $1,000 for being financially prudent?
8. Do You Need Your Cellphone Plan?
Review your plan and see if you're getting the full utility from the service. If you have leftover minutes and data on your monthly plan, downgrade to a more affordable package.
Avoid signing up for the most expensive contracts to get the latest iPhone. Sure, it may look cool, but do you value your image and status, or do you value your savings? You decide.
If you don't ever lose your phone, what are you paying for insurance on it? Chances are you're in for a rude awakening if you ever have to make a claim. Most mobile providers require you to pay a deductible to get a new phone through your insurance benefits. Typically, this deductible is expensive, and you could just buy another phone anyway. If you can, avoid contracts altogether and use a prepaid service.
9. Adjust Your Student Loan
Student loans are the biggest drag on a young person's finances. After you graduate and start working, speak to your student loan provider and have them adjust your monthly payment to an income-driven model.
This strategy can save you several hundred dollars each month on your student loan repayments. While it won't deleverage your loan any faster, you'll have more cash flow each month, and cash flow is king – remember that.
10. Cancel Auto-Renewal Subscriptions
Do you have auto-renewals on services you're not using anymore? Cut them out of your finances and save money. Do you need that subscription box service? Or would you rather have more money in your pocket each month?
Wrapping Up – Keep Improving Your Financial Literacy
Do you have savings goals? Do you understand the importance of saving and investment? Buy yourself a new book on financial literacy every month and start learning how to manage money and grow your wealth.
Start building your library, and you'll find you have a much better understanding of how money works after a year of reading a book a month. Choose books from reputable authors and immerse yourself in strategies that build your financial literacy, your cash flow, and your wealth – Good luck!