When it comes to banking, make sure you have thoroughly done your research before settling on the bank you want. Banks have different interest rates for different saving accounts, so ensure you have carefully gone through them. Here are five hacks that could help you boost your savings.
1. Set a Goal
Once you have settled on a bank that best suits you, set a savings goal. Having a purpose that drives you will be the reason that will keep you motivated and focused on your goal. For instance, your goal could be to buy a house, to purchase a car, to go on vacation, or to start a business. Goal setting gives you direction about where you want to be and where you want to go.
2. Pay Yourself First
Most of us usually start by paying bills right after we get paid. Doing this will often leave you with little to nothing to save. Start by paying yourself first. Have a budget for your bills so you know how much you need to spend in a month. When you get paid, instead of paying your bills first, remove a certain amount or percentage of your earnings and deposit it in your savings account. This will ensure that your savings are growing, and you will still have enough money left to cover your bills.
3. Automate Your Savings
If you are one of those people who lacks the financial discipline of sticking to a savings plan, you can always automate your savings. Set up a transfer from your checking account to your savings account, such as on your paydays. Alternatively, if you were paying a mortgage, and you have cleared it, you could keep paying the “mortgage,” except that now you are paying it into your saving account. The upside is that you will maintain your living standards while saving a lot of money as well.
4. Money Market Account
Another way to boost your saving is by putting your money in a money market account. They are like the regular savings account, except they come with check writing and a debit card. Some banks may offer higher interest on money market accounts than they do the traditional savings account.
5. Open a High-Yield Savings Account
Instead of sticking to your regular savings account, which offers a near-zero annual yield percentage, open a high-yield savings account. Your money will earn interest, even though it will not seem like much, instead of barely earning any interest in your savings account.
Alternatively, go for a certificate of deposit, which has a slightly higher APY compared to a savings account. However, you will have to keep your money there for a specific time because if you take it out before the specified time, you will have to pay a penalty fee.
If you adopt a savings culture and do not see it as a straining exercise that deprives you of certain luxuries, you have begun your first step towards success. The only thing you need to do to get ahead quicker is to be smart about your savings. Remember, the money you save today could, in turn, save you tomorrow.