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Most People Don't Know How To Save Money

Let Me Share With You Some Tips and Strategies To Make Your Money Grow

Do You Have A Savings Account?

So before we jump into things like investing, business, financial freedom, and all that good stuff, we need to look at the basics. Savings accounts. I don't think it gets any more basic than that, or so you might think. According to GoBankingRates, 30% of Americans do not have a savings account, and close to 40% of those have less than $1000 put away. Mind you, this is all in the same country where 97% of American households own a home computer without factoring in laptops, tablets and smartphones. I think it's safe to assume that the vast majority of our society has access to the internet in one way or another, and with that comes the privilege of information that can change our lives for the better. With that, also comes the convenience of online banking, meaning you don't necessarily need to physically go to a bank in order to open a savings account. In my opinion, saving money is one of the first and most important skills we need to acquire when we start thinking about wealth, business, and overall financial literacy. I know there are creative ways to fund a business deal and investments with OPM (other people’s money), but let's be honest, most people won't trust you with their money if you don't know how to manage your own. So let's jump right in.

What is a savings account?

A savings account is a type of deposit account offered by banks and financial institutions that allows individuals to save money while earning interest on their deposits. The account holder can deposit or withdraw money as per their convenience and there is no limit on the number of deposits that can be made.

Key Reasons Why Savings Accounts Are Important:

Emergency Fund: Life is unpredictable and emergencies can happen anytime. A savings account is a great way to build an emergency fund that can help you during tough times. Whether it is a sudden medical expense or an unexpected job loss, having an emergency fund can provide you with peace of mind and financial stability.

Financial Planning: A savings account can help you achieve your financial goals, whether it is buying a house, a car, or going on a vacation. By regularly depositing money into your savings account, you can accumulate funds for your future needs. Set a goal, make a plan, and stick to it.

Higher Interest Rates: Savings accounts offer higher interest rates (some banks more than others) than a regular checking account. While the interest rate on savings accounts may not be as high as other investment options, it is a great way to earn interest on your money while keeping it safe. Make a quick search online on the highest interest paying banks, some may only be available online.

Easy Access: Savings accounts offer easy access to your funds. You can withdraw money from your savings account at any time, without any penalty or restrictions. This makes it a flexible option for short-term savings goals. Try your best to not make withdrawals unless it's an emergency with no other option available, you've reached the set goal, or for investing purposes.

Budgeting: A savings account can help you budget your finances better. By setting aside a certain amount of money every month into your savings account, you can keep track of your expenses and ensure that you are saving enough for your future needs.

Let's Look At Some Strategies To Save Money:

Saving money is an important step towards achieving financial stability and security. However, for people with limited income, building a savings account can be challenging. The good news is that there are strategies that can be employed to build a savings account, even with a small income.

Create a Budget: The first step in building a savings account is to create a budget. This involves tracking your income and expenses, and identifying areas where you can cut back on spending. By creating a budget, you can determine how much money you can save each month.

Set Savings Goals: Setting savings goals is an effective way to stay motivated and focused on building a savings account. Start with small, achievable goals, such as saving $50 per month, and gradually increase the amount as you become more comfortable with saving.

Automate Savings: This is one of my go-to strategies. One of the easiest ways to save money is to automate the process. Set up an automatic transfer from your checking account to your savings account each month. This ensures that you are saving money without having to think about it. I set mine to save a small amount on a weekly basis. I pay myself first before anything else.

Reduce Expenses: Look for ways to reduce your expenses. This can include cutting back on unnecessary expenses, such as eating out constantly, buying overpriced coffee everyday or buying expensive clothes just for the sake of “keeping up with the Jones’s”. You can also save money by negotiating bills, shopping for bargains, and buying in bulk.

Use Cash Instead of Credit: Using cash instead of credit cards can help you avoid debt and save money. When you pay with cash, you are more aware of your spending and less likely to overspend. Later on I'll share some tips on how to use your credit card to make money instead of paying more on interest.

Earn Extra Income: I know what you're thinking, yes, obviously this is easier said than done. For those of us with full time jobs, families etc, it can be challenging to earn more when we have so many things asking for our time, but I just want to share the different strategies people have used and continue to use. Consider earning extra income to boost your savings. This can include taking on a part-time job, selling items you no longer need, or offering your skills or services for hire.

Take Advantage of Savings Accounts: Look for savings accounts that offer high interest rates and low fees. Some banks also offer incentives for opening a savings account, such as cash bonuses or waived fees.

I'm pretty sure you're all aware that building a savings account with a limited income requires discipline and planning. By creating a sense of direction by setting goals, you begin to understand with clarity which way you steer your vessel. By putting into motion a budget, setting savings goals, automating savings, reducing expenses, using cash instead of credit, earning extra income, and taking advantage of savings accounts, you can build a savings account and achieve financial security. Remember, that every single step you take constantly, no matter how small it may seem, it adds to the distance you need that brings you closer to your goal. Even small savings add up over time, so start today and watch your savings account grow!


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