What is the Best Method to Increase your Savings?

Many of us would like to have more money in our savings account. It can not only provide a sense of security but could mean that we will have money to fall back on rather than having to rely on a loan in a time of emergency. We may also want to save up for purchases. There are different methods that people use to increase the amount of money that they save and it is worth thinking about the different methods and considering which might be the best for you to use.

Pay yourself first

Many people feel that the very best way to guarantee that you will save some money each month is to pay yourself first. This means that you will be able to ensure that there is some money available to pay yourself with. If the money gets assigned into a savings account as soon as you get paid, then it cannot be spent on anything else. Often, we will keep checking our balance to see how much money is available to spend and we will spend if we can afford it. If the money has already been put into a savings account then it will not be available to spend. Obviously, we will know that it is in the account so there if we really need it, but it should be left there.

Empty current account at end of month

Many people prefer to wait until just before they are paid and then put all of the money left in their current account into the savings account. Although it is good to do this, compared with leaving it there to be spent, it can mean that there will not be so much to save compared with how much there would be should you put the money in the savings account as soon as you are paid. However, some people feel more comfortable with doing it this way and some will even use both methods, so ensure they save some to start with and then transfer in anything that they have left as well.

Cut down spending on luxuries

The amount of savings you can do will be increased by cutting down the amount that you are spending. Spending on luxuries is the area that it will be easiest to cut down on as you will not have to go without the essentials that you need. However, it is still not that easy. Many of us really look forward to our luxuries and find that they can help to make life a lot more pleasurable. However, if you can cut down some then this can help to increase the amount of money that you have available for saving. It could be that you will be able to just reduce the amount that you have and there may even be some that you could easily do with out if you give things some thought.

Compare prices

Comparing prices on everything that you buy can be a good way to make sure that you are not spending more than necessary. This will enable you to pay less for items and should mean that you will then have more money available to save. You may worry about the quality of cheaper items and you will therefore need to check that you are getting good value for money. It is wise to not only compare prices in shops though but to also compare prices of things that you buy by direct debit such as insurance, utilities and contracts so that you are sure that there is not anything that you are unnecessarily paying too much for.

Earn more

If you do not want to spend less or you feel that you will not be able to cut down any more, then you will have to earn more money if you want to increase the amount of savings that you have. There are many ways that you will be able to earn extra, but you will have to find something that will fit around any job that you do have and any other commitments that you have.

Choosing the right method for you will depend on your own situation. You may try several, all of them or something different. It is worth having a plan though so that you can decide which option is going to be the best for you. Having a plan is important as it will give you a focus and it is more likely to result in a positive outcome. Of course, you may want to change the plan if it is not working, try different things or additional things. It is worth taking stock every few months to see if the plan is working and changing things if it is not until you are happy with the amount that you have saved or the amount that you are saving each month.

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