How to Build Up Your Savings in a Smart Way

How to Build Up Your Savings in a Smart Way

If your savings has taken a thumping during COVID and the aftermath, it may be time to rethink how you spend to get better control of how you save. While the old rule used to be that you needed to have six months of living expenses in savings, the challenge of the last year reminds us that having multiple income streams is also critically important.

Learn New Skills

It is also important to increase your skill set so you can readily improve your quality of life while not increasing your expenses. For example, you can learn to work with foods that are traditionally cheaper, such as

  • rice
  • pasta
  • beans
  • eggs

You can also learn to customize many dishes to your taste and to make planned-overs. A roasted whole chicken can be served as a primary protein with a starch and veggies, then cut off the bone and tossed in stir fry, and finally boiled to make soup stock.

Use Discounts for Necessities

Obviously, we all have parts of our lives that require us to spend. Sign up for clubs and points so you can get discounts, from GoDaddy coupons to free snacks when you take your family to the movies.

Take care when signing up for discounts or points. If you have to buy a certain number of items or spend a particular amount of money to get a good discount, you may be better off looking for the item elsewhere, or working out a way to do without the item.

Use Credit Cards Wisely

If you have credit cards, makes sure they

  • do not charge an annual fee
  • do offer either points or cashback

If you have been working to pay off your credit cards and get a discount offer to roll a balance for no interest for a specified amount of time, confirm that what you save in interest will not be wiped out by the loan fee. Zero percent rollovers with no loan fee are quite rare.

Or Go Back to Cash

Not everyone is good with credit cards. If you fall into that space right now, consider going back to cash. When the grocery sale ad comes out, make your list and note the price, then go get cash for that amount. Buy your groceries with cash only.

Buying with cash offers a lot of benefits. First of all, you need to stick to your list. Secondly, you can sit down and puzzle out exactly what you make per hour with the following formula:

Your take-home pay/hours you spend working, getting ready to go to work, and traveling to work. In short, consider all the time that you need to dedicate to your job when figuring out your real hourly wage.

With this information, you may decide

  • working closer to your home for less money may actually be a better deal
  • the items that you buy may not be worth your time

Real hourly wage exercises can be uncomfortable, but they are eye-opening!

Sell What You Do Not Need

What did you buy that now makes you sad? Stop trying to get value from it personally and sell it for what you can. Now put the money in savings. No more money guilt and your savings balance goes up. Simple!

There are many apps and rounding tools that can help you save money. However, if you have been thinking about them but have never started, skip the digital and go old school. The cash in your wallet should equal the total of your receipts. Once you consistently do that, now you need to review your receipts to confirm that the money you spent was a valid use of your time.

Leave a Reply

Your email address will not be published. Required fields are marked *