PRACTICAL TIPS FOR GROWING YOUR SAVINGS

DON’T DISCOUNT SMALL AMOUNTS

When we talk about growing our savings it is important to remember that any amount counts. Adding $5 to your savings account does count as growing your savings. Sometimes we don’t bother to save because we feel like the amount that we are able to save is not significant enough to bother. However, small amounts add up and it’s always better to have a little bit more than you had. When you focus on saving when you are able to even if the amounts are small you will see that those amounts can have a real impact over time. It feels good to put money into savings. Even if the amounts are small you feel a little accomplishment and it gives you motivation to do a little bit more as you are able to.

TRACK YOUR SPENDING

By tracking your spending, you gain insight into your daily habits and understand the impact of expenses that seem small at the time. Those seemingly insignificant lunch bills add up when you realize how much you have spent on lunch over the course of a week or two. Understanding where your money goes often lets you find opportunities to put a little bit aside for things that are more important to you. It also lets you see that you may not be able to afford certain things. When we really look at what is coming in and going out, we can make better spending decisions.

CREATE A BUDGET THAT WORKS FOR YOU

Without a budget, it’s easy to lose track of your expenses. As much as some people feel that a budget will be too restricting, it’s one of the best tools to help you grow your savings. Based on your income and expenses, do the best you can to allocate funds for savings. While it might be difficult to fit savings into your budget at first, once you really start to watch where your money is going, you can often find little ways to save here and there. Don’t forget to plan for irregular expenses such as annual memberships or insurance policies, quarterly tax payments, and any other expenses that occur at random times over the year.  Some of these might be things like birthday gifts, car repairs, and home maintenance. Consider setting up sinking funds to save for these items each week.

CUT OUT IMPULSE PURCHASES

Impulse purchases can really blow your budget and have a negative impact on your ability to save money. Be mindful of unnecessary spending. Take time to think before purchasing an item that you don’t really need. Consider implementing the 30-day rule where you wait 30 days before buying something to avoid impulsive buys. Even shorter amounts of time like 24 to 48 hours can have a big impact on reducing the amount of impulse purchases you will make. Often after the initial excitement wears off you will realize that you don’t really need the thing that you were about to buy on a whim.

Avoid falling into the trap-influenced by social media. There are so many influencers out there trying to sell you products that they love so that they can earn a commission on the sales. Whether they truly love the item or not, if you end up purchasing something you never thought you wanted or needed, it can have a negative impact on the money you have left for savings.

SAVE ON FOOD COSTS

Meal planning is a great way to reduce food waste. If you purchase food that you are not going to eat you are essentially throwing money in the trash. Try not to purchase something that you think you might make. Purchase items that you have specifically planned to make for a meal. This way the food will get used and your money will not be wasted. $5 spent on a head of lettuce that ends up in the trash, could have been $5 sent to your savings account. Be strategic at the grocery store by sticking to your shopping list and avoiding impulse items. Food expenses can really create a big hit to your budget if you are not careful. Often just being intentional about the food you purchase and how you are going to use it will have an immediate impact on your budget.

REDUCE RESTAURANT SPENDING

Eating homemade meals is so much less expensive than eating out at a restaurant. I read a stat by Forbes that indicated eating at a restaurant is generally 5 x more expensive than eating at home. I have to say that is probably pretty accurate and may sometimes cost even more. There have been a few times that my family has eaten out and spent over $200 for the 5 of us on one meal. Usually, I spent about that much for an entire week’s worth of groceries.

Going out to a restaurant can definitely be a fun treat occasionally.  But, if you are really trying to increase your savings, cutting back on eating out is a pretty easy way to save if this is something you often spend money on. If you have a night that you truly just can’t cook a meal and you still want to save money, consider the lower-cost takeout option.  Pick it up yourself or use a restaurant that does their own delivery.  Skip the doordash or Uber Eats.  They are so much more expensive than taking the trip to go get your food!

USE CASHBACK REWARD CREDIT CARDS

Cash-back reward credit cards can be a great way to earn money that can be put directly into savings. Cash-back credit cards are not for everyone. If you struggle to track your budget and spending and are not sure that you can pay the balance off in full to avoid interest charges then the cash back rewards will not be worth it. However, if you know you are disciplined enough to put the money aside to pay your card in full when it becomes due then credit card rewards can be a great way to put a little extra money into savings. Make sure you are using a card that gets you the best rewards.  Certain cards pay more for groceries, while others give you more for gas, travel, and entertainment.  So, use the one that will get you the most cash back based on your spending habits.

AUTOMATE TRANSFERS TO YOUR SAVINGS

Set up automatic transfers from your checking account to your savings account. Or if you are able to have money go straight from your paycheck to a savings account.  That way you never even see it. Consistently putting even small amounts of money into your savings will really help you build those balances over time. I often like to just randomly send an extra $10 to $25 over to my emergency fund or other savings if I see we might come in a little bit under budget in a particular week.

SET SPECIFIC GOALS

It is difficult to stay motivated to save if you don’t have specific goals in mind. Defining clear savings goals is important. Whether it’s an emergency fund, a vacation, or a down payment, having specific targets motivates you to save consistently. And it can be very rewarding to track your progress as your savings grow.

FIND LESS EXPENSIVE WAYS TO HAVE FUN

There are so many ways to enjoy your life and have fun with minimal cost if you need to cut back on expenses so that you can save a little bit more. Library – we love going to the library and picking up some books on random topics that we happen to find interesting.  Most libraries also have puzzles you can borrow if that is something you enjoy! Free Events – I love finding free events on Facebook.  I am sure there are other ways to find them too.  We love to go to art shows, craft shows, flea markets, food truck events, and so many other things.  We even went to a blueberry festival last summer!

Visit a Park – Just taking a walk through a nearby park and taking some time to enjoy fresh air can be a really nice way to break up the day. Explore Farmers Markets – we went to a large local farmers market near us for the first time last year and had such a nice time.  They not only had local produce and plants, but they also had so many other local vendors selling everything from candles to spices to skin care. Just look around and see what is available in your area that you have not taken advantage of!

DON’T BE DISCOURAGED BY SETBACKS

There are times when we may be doing great with our savings until something happens that requires us to pull a significant amount of savings. Maybe you have to empty that vacation savings account because of a large medical bill because there was not enough in your emergency fund to cover it. These things happen to all of us. Don’t let that discourage you from starting right back up again. Think of the situation you would have been in if you did not have that savings to pull from. You will always be better off if you focus on putting some money aside towards savings goals.

SMALL CHANGES LEAD TO SIGNIFICANT SAVINGS

Don’t forget that those small changes can lead to significant savings over time. Putting money into savings consistently helps build good financial habits. When you see your accounts growing, even slowly, you will feel encouraged to add just a little bit more when you are able to.

Thanks so much for checking in! If you would like to hear the podcast version of this topic check out Lola’s Frugal Life Podcast! Also, be sure to check out my other blog posts on this site!

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