A savings account is one of those money products that everyone knows they need, but don’t always have. Why is that? If money provides financial security then why doesn’t everyone save money on a regular basis?
There are three main reasons why people don’t boost their savings, even though they need to. The first reason is because people don’t think they can afford it. Although that is a valid point because life is expensive, but I think we can all find room in our budget for some savings.
The second reason is that savings take a back seat to other financial priorities. If you’re in your 20s or 30s you may be living life to the fullest and just barely getting by. It can be hard to think about the long term when you’re just making ends meet in the short term.
The third reason why people don’t contribute to their savings account is because they keep spending money. I once asked a financial planning client “Why don’t you save money?” Her answer was “I do save money, I just spend it when I need it.” I think we can all agree that spending is not saving.
If you want to boost your savings account here are three easy ways to do so today:
Put savings into your budget…first
So many people get a paycheck, pay all their bills and save whatever is left over. That’s a big mistake and it’s not helping boost your savings account because more money can always be spent. So save first.
Set a reasonable amount of money aside every time you get paid and build out your expenses afterwards. You may not be able to have all the things you want in life, but at least you’ll have savings in the bank.
Make your savings a priority
Yes we want to take nice vacations, yes we want to drive a nice car and yes we want to eventually buy a big house. But who says you can’t do those things if you save? In fact you need to save money in order to afford all the nice things that you want in life.
Don’t put savings on the back burner and worry about it later because there will always be another day, a new excuse and something else to buy. If you don’t start saving now then you’ll never do it. You should always save, no matter what. Even if you’re paying off debt save at the same time.
Just stop spending
If you work hard to boost your savings account why would you throw it all away on a shopping spree? There are different ways to save and cutting expenses (or making more money) is the only way to be able to afford to do it.
You can save for the long term and open a retirement account, you can save for your bigger goals with one savings account and start an emergency savings fund for short term savings. I’ll be honest, I do have a savings account where money goes in and out whenever I need it, but at the end of the month the balance goes back to my goal – which is $1500.