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Savings, Money Management

Boost Your Savings in 3 Simple Steps

Building a sufficient savings can seem like a daunting, unachievable task if you’re starting from square one. Most people know they should have an emergency fund and around six months’ worth of expenses saved for the unexpected. Then, of course, there are longer-term goals like saving for college and retirement. If you are overwhelmed, remember it’s easier to meet a big goal if you break it into smaller ones. Here are three steps you can take today to make an immediate impact on your savings account:

1. Make it Automatic

Online banking makes it easy to set up an automatic transfer of funds to your savings account. You can schedule it based on timing that works for you, whether that’s a few dollars every day, or a larger transfer that happens on the same day your direct deposit hits.

It doesn’t hurt to ask your employer if they can help you automate savings. Many companies are happy to split your direct deposit into a few different accounts. Of course, you should take advantage of any retirement plan being offered. But even filtering funds into a regular savings account will help. As the saying goes: out of sight, out of mind. You’ll be surprised how quickly you can save this way.

2. Cut Unnecessary Spending

While it’s important to review your monthly expenses to discover areas where you can save money, you don’t have to wait to make cuts. If you stop and think about it, you probably have at least a handful of daily or weekly expenses that you could easily stop right away.

Skip the daily latte from the local coffee shop. Make lunches. Cook your own dinners instead of going out. Rent a movie instead of going to the theater. Be intentional about skipping small expenses and moving the money you would have spent over into your savings. Small dollar amounts will very quickly add up.

3. Switch to a Higher-Yield Savings Account

If you are just using your basic savings account to sock away money, chances are the interest you earn isn’t very much. If your funds are sitting untouched, consider higher-yield options like a money market or share certificate. These accounts offer less flexibility to pull out funds if you need them, but the positive is that you earn higher dividends.

Once you create solid savings habits with these simple steps, it will be easier to build on them to reach your overall savings goals.

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