If you’re on a tight budget, it may feel impossible to increase your savings, especially if your income isn’t changing and you’ve got a family that needs to eat. However, a tight budget doesn’t mean your savings account or rainy day fund can’t grow – here’s how to increase savings.
Make Saving a Priority
Even if you’re on a budget, you may not realize how much you spend on “wants” versus how you spend on “needs.” Your family’s needs are the things you can’t live without – groceries, electricity, or putting gas in the car. Needs don’t change from month to month.
Wants are the items that may improve your lifestyle, but you won’t go hungry without them – like a new flat screen TV or a Netflix subscription.
Many people may treat their savings like a want rather than a priority, which makes it harder to grow their savings. Adding money to your savings account needs to be something that happens every month, just like paying a bill or purchasing groceries for the week.
Set Saving Goals
Regardless of what you have savings for, it’s important to keep realistic goals about your savings account. For instance, maybe you plan to set aside $50 every month so that you can save up for a vacation with friends – having a specific dollar amount helps you track your progress and stay motivated to meet that goal.
Setting a savings goal can also help you give up frivolous items that you don’t need. You’re more likely to turn down a new piece of clothing or some takeout if you know that you have to meet that $50 goal every month.
Find Areas of Your Life to Save in
People with the same income every month can struggle to increase their savings since their cash flow doesn’t change. However, increasing your savings doesn’t always mean increasing your cash flow – it can also mean cutting down on areas of your life where you can afford to.
Let’s say that you pay a $60 cable bill a month, but a specific streaming service offers your favorite TV shows for only $10 a month. Cancelling your cable and purchasing the streaming service can increase your savings by $50 per month – or $600 a year!
You may not always know which areas of your life you can save in, which is why it’s a good idea to sit down and list out your expenses. Even just cutting out one or two wants from your budget could add hundreds of dollars to your savings annually.
Directly Deposit Money Into Your Savings
If money in your checking account seems to disappear with weekly or monthly expenses, you can always opt to direct deposit money into your savings account. Maybe your paycheck deposits into your savings, and you take out a specific amount for your checking account each week.
Direct deposit may seem like a chore, but if discipline is your problem, it can be a great way to make sure you meet your savings goals.