Today’s economy is uncertain, and one of the best ways to guarantee your financial freedom is through saving.
When faced with unexpected expenses, you don’t want to have to borrow to make ends meet. Savings create a backup avenue for uncertainty and financial security.
Nevertheless, finding the extra funds to save can be quite a challenge. The good news is that small changes to your financial life with the aid of your bank can go a long way.
With that said, do you want to learn how to save money?
Here are seven ways you can do so with your bank:
Draw Up A Budget
To create the ideal budget, you must consider the cost of living comfortably and find ways to reduce that cost without becoming too uncomfortable.
For example, if you drink coffee, instead of buying a cup every morning, make your cup. In this manner, the cost of purchasing coffee would be diverted elsewhere.
More banks now offer budgeting tools that can be used via your computer or mobile devices, so you can keep track of your finances on your banking portal or app.
These tools differ from bank to bank. They help you track your expenses and plan. Using these bank tools to budget reduces the number of steps you normally take when budgeting, which makes it more likely that you will stick to it.
Sometimes, you might have problems sticking to your budget. You can combat that by keeping a low checking account balance.
You can avoid overspending by removing your money from plain sight. You’ll have enough money to cover what you need without going over budget or spending money that was meant to be saved.
Open A High-Yield Savings Account
A high-yield savings account is a savings account that pays higher than the national average of a typical savings account. Most banks offer a 20 to 25 times higher yield than a normal savings account.
High-yield savings accounts use a compound interest system rather than the simple interest system used on regular savings accounts. This means that you earn interest on your principal balance and the interest it earns.
How the interest is compounded is based on the type of high-yield account.
Before you settle on a type of account, be sure to weigh in factors like initial deposit requirements, interest rates, minimum balance requirements, and all possible account fees
Switch To A Bank Account Without Fees
You can save money by switching to a bank that doesn’t incur fees. This is a simple procedure, but the only banks that do not charge fees are online banks.
Contrary to popular belief, online banks are just as safe and insured as traditional banks are. And the best part is that you can switch easily without leaving the comfort of your home.
Simply set up your bank account online and start saving money. An added benefit to online banking is that it helps you save on extra costs as most online banks don’t require a minimum deposit to open an account.
Limit Credit Card Usage
While a credit card offers a bunch of perks, it’s also a way to incur excessive debt. If you have the habit of missing your payments, it’s easy to end up in financial prison while the payback interest rate keeps rising.
Credit card interest is charged on purchases only when a balance is carried from one month to the next. Your interest rate then becomes irrelevant if you pay your balance in full every month because you don’t get charged interest at all.
You can set a spending limit and a balance alert on your card. And if that’s not enough, you can request a credit limit reduction. The only downside to this is that by reducing your credit limit, your credit utilization ratio will increase.
You will inadvertently reduce your credit score once the credit line reduction hits your credit report. Sometimes, it’s not about how much money you have charged to a card, it’s about how many cards you have.
If you have more than one card, you’ll have multiple monthly credit card payments. Reducing the number of credit cards you have can save you more money.
Set Saving Goals
At the start of every month, create a goal of the amount you want to save before the month runs out. Making a goal and making it a priority will assist you in developing good saving habits.
When setting your goals, have a specific goal in mind. It could be for retirement, a vacation, a college fund, or the purchase of a new car. You can create separate savings account for each goal.
That way, you can easily divide your resources into each account based on the saving timeline and the amount you will need to reach each goal.
Automate your Savings and Bills
If you find it difficult to remember to transfer your savings from your checking account, you can set up automatic transfers and deductions with your bank.
You can schedule automatic transfers from your checking account to your savings account to occur on the same day each week or month. The automatic moving of money keeps it out of sight, stopping you from overspending.
Companies often charge late fees when your bills aren’t paid on time. Automating your bills helps you avoid those additional charges by paying before the due date, and it also takes away the pressure of trying to remember when a bill is due.
Cancel Unnecessary Subscriptions
There’s that gym you’re a member of but you’ve never stepped into, or the streaming platform that you’ve never used. On their own, they might not cost much, but together over a long period, they add up to quite a sum of money.
Canceling subscriptions you don’t need helps you save more money and put your finances together.
Most of the time, subscription fees leave your account without you noticing, so you need to track your expenses.
Take your time to look through your bank account for any transactions you didn’t expect or any subscriptions you forgot to cancel.
