In addition to long-term savings, financial experts agree that consumers should aim to have three to six months living expenses saved for emergencies. If you are having trouble establishing a nest-egg, don’t despair. Following are some simple ways to boost your savings:
Make it automatic. I know a lot of people who have more than enough taxes withdrawn as a sort of forced savings. You can do this—and earn a little interest—by having money automatically deducted from your checking account into a separate savings account. Even better, if your employer has the capability to automatically deposit your paycheck, have some of the funds directed into a savings account.
Enjoy making more money. Many people have untapped talents. If you have a hobby, why not turn it into income? Whether you enjoy photography, painting, knitting, or metal work, consider possible ways to earn money by doing what you love best. Babysitting and lawn work are also good ways to earn additional money.
Downsize. Most people have garages, basements, and attics full of items they no longer want or need. Holding a garage sale or advertising some of your things online could result in a boost to your savings account. Use gifts wisely. If you receive unexpected funds, do not be tempted to spend them frivolously. Instead, put all money received from tax refunds, inheritances and gifts into an interest-bearing savings account.
Keep the status quo. If you get a raise, pretend you didn’t. If your expenses suddenly decrease, such as when you pay off a car, bank the difference. The trick is to do this as soon as the change occurs—after all, you can’t claim to miss what you’ve never had.
Finally, make a commitment to pay down debt. Reducing your debt allows you the freedom to make smart future financial choices. And remember, you don’t always have to choose between paying down debt or establishing saving. Sometimes the right choice is to do a little of each.