If you’re having difficulty growing your savings account, you’re not alone. Single adults under the age of 34 have an average of $2,729 in savings, as reported by CNBC. Single adults who have children have socked away much less, coming in at $1,350. Couples fare a bit better, however, they still have difficulty saving a substantial amount. Fortunately, there are a few psychological tricks that can help you save money.
Automate Your Savings
If you have to think about or remember to do something, chances are that you won’t. You may even come up with excuses for not doing it. This is especially true when it comes to saving. That’s why it’s so important to automate your savings. You can do so by setting up your direct deposit so that a specified amount of money goes into your savings account each payday. Certain banking apps will also allow you to round up purchases and put the change in your savings account.
Grow your savings even faster by looking for ways to maximize your interest. Place your money into an interest-bearing account with a favorable rate. In most cases, you’ll find these at online banks and credit unions. You may also want to consider investing in CDs and/or opening a money market account.
Saving can seem overwhelming, especially if you don’t have a lot of money to begin with. However, the goal is to save any amount you can afford. If you can only afford $5 to $10 dollars a week, save it — believe it or not, it will add up! And when you do get a windfall, such as an income tax refund, birthday present or bonus, save a portion of it as well.
Sleep on It
If your goal is to save money, you have to be careful about what you spend. For this reason, it’s a good idea to pause before making purchases. Sleep on it and ask yourself these critical questions:
- Do you need it?
- Can you afford it?
- Can you get it cheaper?
- Can you buy a used one?
- Is it worth the cost?
- Can you wait?
By asking yourself these questions, you can avoid making unnecessary or impulse purchases that you’ll regret later.
Many people don’t realize just how much money they spend on coffee, eating out and subscription services. Fortunately, there are banking apps that allow you to track and categorize your purchases in real-time. Get one of these apps and check in periodically to see if you can change your purchasing habits. You’d be surprised by how much money you can free up by making simple changes. And that money could go into your savings account.
If you use a rebate app, or if you get a rebate on a purchase, put the money you earn into your savings account. This is a great way to pad your savings account without having to dip into your checking account.
The Work Hour/Test
Whenever you’re tempted to spend money rather than save it, perform the work/hour test. Figure out how much work or how many hours of work you would have to put in to make the purchase. If the sacrifice seems excessive when compared with what you’ll get in return, it likely is not worth it. Look for ways to get the item cheaper or forgo the purchase altogether.
A healthy savings account is vital for your financial stability and future. It can help you plan and save for large purchases, and it can cover large, unexpected expenses that might otherwise bankrupt you, such as emergency medical bills. For this reason, you should strive to save as much money as possible.
~Here’s to Your Success!
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