It’s almost New Year! It’s time to set New Year’s resolutions. For many, increasing your savings is usually one of these things.
Barring any major life events, this is the perfect time to start increasing your savings and pushing your financial plan to the limits.
Whether you’re looking to get out of debt, or trying to maximize your investments, here are five tips to boost your savings you may not have thought of yet.
1. Use a hybrid checking/savings account
You probably have a checking account by now. You may also have a savings account. But what if you could get all the benefits of a savings account (i.e. higher interest) in one checking account?
This is what high interest checking accounts are all about. It’s a checking account, but the interest rate is high!
Now, you can get the benefits of a savings account through a current account. You don’t have to worry about having one account for transactions and another for earning interest.
Plus, attention is nothing to scoff at! You can earn up to 5% interest on your money!
This is a great way to boost your savings because you can earn more money than you can in a regular checking account.
Some popular choices include:
2. Break down your recurring monthly expenses
One of the biggest ways to boost your savings is to cut your budget and evaluate your recurring monthly expenses. Your recurring expenses are usually the ones that eat up most of your extra money and — believe it or not — you probably have the most control over them.
One of the scary things about recurring monthly expenses is that most people don’t bother to look at them once they start.
Here are some common recurring expenses that you may be able to save a lot of money on:
If you still don’t know where to start cutting your expenses, watch this video on how I saved over $500 a month from my budget:
3. Increase your 401k contribution
One of the easiest ways to boost your savings is to simply increase your 401k contribution. Although it’s very easy to do (just log into your employer’s website or tell your HR representative) – it can be an emotionally difficult decision.
Remember, however, that your 401k contribution is pre-tax. So, when you increase your savings, you will also pay less in taxes. As such, the increase will not reflect significantly on your salary.
Another way to boost your savings is to simply add any raises or bonuses you receive at work to your 401k, up to the 401k contribution limits.
4. Maximize your cash back for what you already make
No matter how frugal you are, you’re already spending some money every month. Why not get rewards and cashback for the spending you’ve already made. This can add up to $100 per year in additional money that you can use to achieve your financial goals.
Some of the best cash back credit cards allow you to get up to 2% cash back that can be deposited into a bank or brokerage account. hint: Fidelity Cashback Rewards.
The key to maximizing your cash back is to put as much as possible on the card, then pay off the balance in full each month like a debit card.
This does two things for you:
- By putting all of that on the card, you can maximize the cash back you can earn each month.
- By leaving your money in your bank account until you pay off the balance in full, you will likely earn more interest on that money.
Check out some of the best cash back cards here, and see if they make sense for you.
5. Start a side hustle
Finally, one of my favorite ways to boost your savings is to simply earn more money. Earning more money is the best way to achieve your financial goal – whether that’s getting rid of debt or increasing your savings.
The reason is simple – although a budget is important, you can only cut so much of your expenses. However, the potential to earn is limitless – there is no upper limit to the amount you can earn each month.
There are many ways to earn extra money. You can start with your employer and simply focus on working extra hours or overtime. You can get a second job and work nights and weekends.
You can take advantage of the gig economy and start driving for Lyft, delivering for Doordash, or even renting a room in your house on AirBnB.
The bottom line is that there are many ways to earn extra money. You can use this extra money to boost your savings this year.
If you don’t have a great idea, check out this list of 50+ ways you can make money.
Final thoughts
Now is the perfect time to add momentum to your money. Look at these five strategies to boost your savings this year and take your personal finance game to the next level.
Tell us what strategies you prefer to boost your savings!
