How To Make Your Savings Boom

Posted by Checkbook on Jul 02, 2020

Despite Social Security, the average American worries about retirement. Social Security was not designed to be the sole source of retirement income. It’s not too late to start thinking about saving now.

Saving is a pain now but you’ll thank yourself later when you can afford that nice winter trip to Hawaii. There are tips and tricks to make your savings boom:

Budget and Goal Creation: Set aside three “piles” - one for regular bills, one for savings, and one for funds. Have a specific goal in mind for your savings purpose but make sure to pay off your debt first. Remember to be realistic. you might be able to save for that new car by next year, but does that mean you won’t be eating breakfast lunch or dinner for the next 12 months? Just as businesses can use tools like QuickBooks for budget management, individuals can use Mint.com to track savings and spending.

High Yield Savings Account: Online banks might have interest rates that are at least 10x of what your local banks are offering. If you’re going to put your money into a bank account, you might as well get the highest rates. Lock your money in, sit back and let the interest rack up. Moreover, high yield savings do not have the binding commitment of CDs, allowing you to withdraw your money when you need to.

Investments: Study and invest in financial products such as stocks, bonds, and mutual funds. In the long-run, the S&P 500 Index turns positive. All investments have no such thing as guaranteed returns, so this may not be the most viable option for risk-averse individuals. There are many financial instruments available for your own tastes and preferences.

Side Hustle: Develop a side gig or project that you are interested in. Eventually, it will generate cash flow and is bound to increase the numbers in your bank account. Creating a source of passive income allows you legroom to take risks. You watch YouTubers everyday so have you considered starting your own channel?

Sacrifices: Before taking out your wallet, think whether you truly want or need something. Do you really need that extra drink at happy hour? Think Marie Kondo – Does it spark joy?

Managing Costs: Take simple steps to reduce your costs. You can take shorter showers and make sure to switch the light off to save on utilities. Perhaps, buy generic items instead of brand names. Generic items don’t necessarily compromise on quality but come at only a portion of brand name prices.