Well Kept Wallet is on a mission to help you grow your savings account this year. A plush emergency fund – combined with little to no debt – is a key factor in creating a life of financial independence and financial freedom. When you’ve dumped your debt and created a savings account balance that will allow you to sleep peacefully at night, you’ve taken the first major steps in building your financial foundation on solid rock.
This Marketwatch report tells us that most Americans – a stunning 62% – have less than $1,000 in a savings account. That means that over half of American families and individuals have less than a grand available to them to cover unexpected expenses or a loss in income due to a job layoff, a medical emergency or a large car or home repair.
Since most financial experts recommend 3 to 6 months’ worth of expenses as a smart dollar amount for an emergency fund, it’s not too difficult to calculate that most people aren’t nearly as prepared for a financial emergency as recommended.
However, it doesn’t have to be that way. Today we’re going to share 7 ways you can grow your savings account in 2016. With some education and a bit of time and effort, you can increase your savings account balance, your financial well-being and your peace of mind all at the same time.
Nothing works to increase savings like treating your savings account as you would a monthly bill. By automating the amount of money that you put in savings each and every paycheck, paying it just as you would a monthly bill, you get that money out of your checking account before you even see it, giving you a much lower chance of spending that money on something you don’t truly need or want.
Contact your employer to see if they offer the ability to automatically deposit some of your paycheck directly into savings and some into checking to help you reduce even further the chance to spend money that you could be saving. If your employer doesn’t offer such an option, set up a direct transfer from checking to savings each week, twice a month or once a month through your bank or credit union.
if you’re worried about being tempted to take the money out of your savings account once it’s in there, open a separate savings account at a separate bank, and refuse to get a cash card for that account, making withdrawing money from the account extra difficult. The extra time and effort needed to withdraw money from a separate account with no cash card access will give you a longer amount of time to consider the consequences of spending that money before you’re actually holding it in your hand.
2. Join a Movement
One of the projects we’re really excited about this year is the Save 50 project. The goal of this project is to bring together a large group of people who are working toward saving half of their income and increasing their financial independence. Use the power of people – to walk side-by-side with others as you get motivated to save more and spend less.
3. Get a Side Hustle
Get a side hustle – whether it be overtime hours at work, a second job or a plan to start your own business – and commit to putting every extra dime earned into a savings account. There are many short-term side hustles a person can do to make extra money for a short period of time that will add up to big income and a big increase in your savings account balance.
4. Dump Unnecessary Expenses
I was talking with a friend this week who casually mentioned that she spends $216 a month on a cable TV package that she rarely uses. Friends, that’s nearly $2,600 a year that could be going into her savings account! Using a challenge everything budget and a spend-tracking plan, work to see what types of expenses you could do without for just 12 months, and watch your savings account grow to numbers you never would have dreamed of.
5. Save Your UM
Unexpected money, or “UM” as some people like to call it, comes in all shapes and sizes and is a powerful path to a bigger savings account. Unexpected money could come in the form of:
- A tax return or bonus at work
- Monetary savings on something you had to buy
- A monetary gift such as a birthday gift or an unexpected payment of a bill or restaurant check by someone else
- Monetary savings on something you thought you had to buy but then didn’t
By choosing to put this money that you never expected to have straight into your savings account, you can help grow your savings balance painlessly and seamlessly.
6. Sell Your Stuff
Most people have a house or apartment full of stuff they rarely or never use. Make 2016 the year where you go through each and every closet, drawer and storage unit and put the stuff you no longer want or use in a pile. Then sell that stuff via Craigslist, EBay or a Facebook group. Commit to put all money earned from the selling of unwanted stuff straight into your savings account. Selling unused items was a huge part of Deacon and Kim’s success as they worked to pay off $52,000 in consumer debt in just 18 months.
If your car or home (whether it be rented or owned) is costing you more than it needs to, consider downsizing to save money each month. Look into ways to get cheaper housing, and look into the possibility of selling your car and purchasing a reliable car that costs less. Even if you can save $100 a month by downsizing your car or home, you will have added an additional $1,200 plus interest to your savings account by the end of the year.
A new year means a fresh start, my friends. Use the motivation that comes along with starting a new year to give your savings account – and your net worth – a boost. Let 2016 be the year that you make leaps and bounds towards your dream of financial freedom.