Thursday, January 15, 2015

4 easy ways to build your savings account

I mentioned that one of my 2015 goals is to add $5000 to my savings account. Unless some unknown distant relative dies this goal is not going to be an easy one, but just because it's going to be difficult doesn't mean it has to be impossible. I'm not saving particularly for retirement, or a house downpayment, or to have a baby, or send someone to college, or to travel. I'm just saving to build my savings account. I'm only 23, so I figure the more I invest into my rainy day fund now the better. Somewhere down the road I'll be thankful that I put that $100 in my savings account instead of spending it on a pair of shoes.

First let's break that $5000 down into a more reasonable sum; every month I need to deposit $417. See that already seems more manageable! I think that's the first big thing you need to do when facing any large amount of money, simply break it down. I've come up with 4 main ways to work towards building my savings account. None of these alone would make a very large dent, but when you add up all the small amounts I think it'll be enough to get me to my goal.



1. Direct Deposit - This is probably the easiest way to save money; you can't spend what you don't have. My job allows you to get your check direct deposited into more than one account, meaning I can put money straight into my savings account without it ever touching my checking account. This is great because if I never see it in that account in my mind it's like I've never had it to spend. I recently received a small pay raise, this plus a little bit more I have direct deposited into my savings account. It's a small amount that I won't miss each pay period but when you multiply it by the 26 times I'll get paid this year it's enough to add up.

2. Stick to a budget - You won't be able to add to your savings if your checking account is going to 0 each month and you're in major credit card debt. While you never want to go over your budget, you also don't want to be tempted to feel the need to spend up to your budget. Maybe the weather sucked all month and you never wanted to leave the house on weekends so you only spend half of what you budgeted for entertainment, there is no reason for that extra to sit in your checking account to be spent on something silly. As long as you've left yourself a cushion each month you can put any extra of your budgeted money into savings.

3. Alternative earnings - There are so many extra ways to gain a small additional source of income each month that can be used to build your savings account. Open an Etsy shop, sell unused items, pick up an extra job like babysitting or dog walking; these are all great options that allow you the freedom to decide how much time and energy you want to put into each. Two other options I'm currently using are Swagbucks and Ebates. With Swagbucks you do little things like watch videos (download the mobile app and let them play while you're in the shower or getting ready in the morning) or answer daily polls and earn points that you use for gift cards to places like Target or WholeFoods. Ebates is a website that you go through when shopping online at a ton of stores like Nordstrom and BaubleBar that gives you back a percentage of your purchase as a check or paypal payment. Both are seriously so easy to use; in just the couple of months I've been using them sparingly I've earned over $50.

4. Miscellaneous -
    A. Every penny counts - With the exception of Sonic Happy Hour you'll probably never pay for anything exclusively in all change. So while I love my pineapple print coin purse as much as the next girl I've realized there will never come a point when I'd use those 40 nickels hiding inside. But you know what could use those, my savings account because 40 nickels is what it takes to make a complete roll and an extra $2 in my account. In your mind/budget you've already spent this money anyway so it's like a little trick that you're playing on yourself. You could try to use cash more often to help build up your coin pile, but I think you'll really be surprised how much you'll find if you simply clean our your purses and car.
    B. Ask for it - When someone asks what you want for your birthday or Christmas or Easter or whatever other random holiday you get gifts for, tell them you want cash or gift cards for things like gas or groceries. I know people usually don't love giving these because they're seen as "lame" gifts but if you explain that you're really trying to build up your savings account I think they'll be more willing. This will especially work well with older relatives because it shows you're responsible, and you may even get lucky and they'll throw in a little extra because of it.
    C. Cut back - This is such a no brainer I think we all just forget about it. Cut back on a few things each month and use those savings to build your savings account. Some great examples are: only order water when dinning out (approximately $2 per trip) or skip your morning coffee stop and drink whatever's in the pot at the office (approximately $4 per trip). These small costs really add up over time; in an average month doing just these two things would result in my being able to deposit $40.


What are your tips to build your savings account
Want more advice on how to manage your finances? Check out this guest post I recently shared from Koryn!

3 comments:

  1. You're right--direct deposit is amazing at preventing us from spending some of our earnings. I follow a savings rule I read about somewhere years ago; I save every $5 bill. No matter where or how I get it, I save every paper Abe Lincoln. I saved nearly $200 one year doing that alone!

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  2. Great tips! I'm also trying to grow my savings account, too, though it's hard because I'm doing a lot of traveling (NYC! Thailand! Iceland!) However, saving really is a priority!

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  3. These are great tips! Right now our focus is getting out of debt, but I would like to set aside some to save too!

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