It is the New Year resolution of quite a lot of people to better their financial conditions. Most of them have a list of to do’s and don’ts in order to achieve this resolution. Number one in the list of to do’s is to save more. These savings are attributed to different accounts and purposes like retirement principal, emergency savings, savings account, and others. For most of these people, saving is not a habit and it may seem a bit complicated and confusing initially, when so is not the case. To address this very issue here are four easy as pie ways to boost your annual savings.
- Maintain Separate Accounts: Make sure to have your primary account and savings account enlisted in separate banks or institutions. A very distinct advantage of doing so is that you will not start scraping through the savings portion in times of apparent need, thereby denting your savings badly and not having anything to fall back on in times of actual need. When you have a savings account in a separate financial institution and a separate taxable investment account serving as an emergency fund, the inclination above mentioned changes as it drives in a distinct degree of separation in to the picture. With the separation in place, it is no longer as easy to access the savings account and requires extra effort. That way you develop the ability to differentiate between actual emergencies and apparent ones.
- Save Automatically: The easiest and very efficient way to save is to make automatic deductions from your paycheck. By making automatic deductions from your paycheck to a taxable account or an emergency savings fund every month for different purposes, you are making a regular contribution to each of the goals you have planned for. But, for these automatic deductions to work and show a major difference, a little pre-planning is necessary. Instead of thinking that you have money which you have deposited, safely tucked away and ready for use at any moment you have to play around your daily expenses like the money deposited is not there at all, thereby prioritizing your spendings further.
- Regular Increase In Saving Amounts: Make it a point to increase your contribution by some portion every now and then such that it works as a shot in the arm for your saving amounts. Whenever you get a raise or promotion, the amount of your monthly saving should also go up by some ratio. Same goes for any bonuses or the like, which should be reflected in your savings account as well. Fix an amount which you are comfortable with to put aside every month and then stick with it religiously. Through a little trial and error and a little experience over time you can fine tune your money management skills.
- Turn Cash Back Rewards Into Savings: A few credit card rewards schemes allow you to make direct account deposits. Get these deposits made to your hard to access savings account thus making these extra little incomes contribute to your saving funds.