Having savings for emergencies, retirement or other life events is a common goal. But when the economy is uncertain and people are paying significantly more for everyday needs, saving is not always a top priority. There are ways to put back some money, even when the economy is in a downturn. While savings should come after taking care of your basic needs, setting some money aside for the future is a good idea if you can afford it.
Let go of the luxuries
It can be difficult to reduce the amount of money you spend on non-essential items. Streaming services, travel expenses and pricey gadgets can enhance your enjoyment of life, but they can also take away any extra money you have that could be going into savings. Write down all the extras you purchase in a month and take a close look at what you could do without. Consider dining out less, buying generic brands of groceries and personal care items, and looking for cheap or free hobbies. While it’s not fun to cut out spending on things you enjoy, the security of having savings for the future makes it all worth it.
How to add more to your savings account
The first step in increasing your savings is to pay off high-interest debt as quickly as possible while still taking care of the basics. While this may seem counterintuitive, keeping high-interest loans and credit card debt greatly reduces the amount you can save for the future. Consider having a specified amount transferred directly from your paycheck each month into a high-yield savings account. You’re much less likely to miss the money if it goes into the account automatically, and you’re also less likely to touch those funds when they’re in a separate account.
Increasing your savings can seem like a luxury, especially in hard economic times. But saving is important for emergencies and for reaching future goals. By cutting back on luxuries and being more careful with your debt, you can put back money each month, slowly increasing your savings, which will give you peace of mind that you are better prepared for your financial future.