Having money in the bank is great because you can see your progress towards your goals. It also provides good protection to absorb shocks and surprises without resorting to debt. So how can you increase your bank balance – perhaps double your money?
Pay Yourself First
One of the most important steps to take is to prioritize saving. You may know exactly how much you spend each month on your rent or mortgage payment – you need to pay that amount or you’ll find yourself on the street. Can you say the same about the money you set aside for your financial security?
“Paying yourself first” means making saving a priority. When you get your paycheck, you might be tempted to pay the bills, buy groceries, and spend some cash, saving what’s left at the end of the month. But if you pay yourself first, you allocate a portion of your paycheck to savings and then try to live on what’s left. A general desire to save money won’t get you where you want to be; you need to designate specific amounts and implement a plan – preferably automatic – to work toward this goal. Here are some steps to take:
- Open an online savings account and arrange for an automatic monthly transfer to that account (start with a few dollars if that’s all you can afford).
- Tell your employer to send a portion of your paycheck to the savings account – not the regular checking account that you may be tempted to spend.
- Enroll in the retirement plan offered by your employer.
- If you use a budget, create a new category for “monthly savings.”
Control Your Spending
For most people, the quickest way to save money is to cut costs. It’s also the most painful (and may not be the most effective if it’s hard to maintain).
How do you do this? Get a handle on how much you are spending. Track your expenses, whether you use pen and paper or an app or budgeting software. Don’t put too much energy into choosing the “best” system to track your spending – just start. You can change your mind about the details later.
If you have trouble keeping track of things, use electronic payments so that the bank creates a record for every transaction. Pay your bills online, make purchases using a debit card (or credit card you pay off each month), and reduce cash spending. Numbers don’t lie. Look at where your money is going and assess whether you are getting your money’s worth. Once you take a hard look at where your money is going, there are many ways to cut costs. You might even decide to downsize your home or vehicle to free up more cash for saving.
Increase Your Income
The flip side of cutting costs is increasing what you bring in, and there are many ways to do this. Unfortunately, it takes time to earn more money, but hopefully, you won’t have to do this forever.
A quick way to earn more is to add a part-time job. Taking on extra work for a few months or so may give your bank account a boost. Or ask your employer for extra hours. You may even consider negotiating your salary or changing jobs to secure a higher pay, especially if raises are minimal or nonexistent in your current position. Keep improving your skills to show your value to employers if you want to climb the job ladder.
Note: In the digital age, you can easily earn some extra money at the click of a button. Whether it’s selling old items you have in your home or leveraging your skills to boost savings, consider using these apps to get there.
If
If you needed a bigger change and do not want to rely on your bosses to pay you what you deserve, start your own business. As an entrepreneur, you will have more control over your own destiny, along with more positive opportunities. You can manage the risk by starting part-time and then moving to a full-time job when things improve.
In addition to working smarter and harder, you can also increase your income by selling some property or even renting a room in your home on Airbnb.
Make Your Money Work for You
Once you have built your bank balance, start earning more on the money you have saved. This won’t make or break you financially, but why leave money on the table? Make sure you’re getting a competitive rate on your savings, and consider transferring to a high-yield savings account if necessary, and using certificates of deposit and money market accounts to earn more interest.
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Source: https://www.thebalancemoney.com/how-to-increase-your-bank-account-315475
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