During America Saves Week 2017, it's time to remember the importance of saving money.
You may already set aside a portion of your paycheck every month, but is it enough? Follow these six tips to help you save even more money:
1. Automate your savings
According to an infographic from America Saves, about 38 percent of American households said they're making good progress toward savings goals. If you're one of the households struggling to meet a New Year's resolution to save more money, consider automation.
Automation is one of the easiest ways to boost your savings and retirement accounts without any effort on your part. There are two ways to automate your savings. The first involves you meeting with a human resources representative at your job to adjust how you're paid. Every pay period, your employer will deduct an amount you specify from a paycheck and deposit it into your 401(k).
The second way to automate savings is through your bank. Contact Landmark Bank to seamlessly transfer money from your checking account into a savings or investment account. You're able to decide the transfer amount and frequency of these transfers.
Even automatically saving $25 a month is better than nothing. Annually, you'll save $300 plus interest.
2. Set goals
Why are you saving money? Is it for an emergency, or do you eventually want to buy a house? By setting goals, you'll have something to work toward.
The goals you set can vary and should differentiate in scope. For example, Bankrate recommended creating three savings buckets for short-, medium- and long-term goals.
Short-term ambitions are those you can meet within one or two years. These goals might include purchasing a car, going on an overseas vacation or buying a new computer in a few months.
Mid-term goals are those you want to accomplish between now and retirement. Buying a home, paying off your student loans and getting married are all mid-term goals.
Finally, long-term savings goals are far into the future. Retirement should be your No. 1 long-term savings goal. After all, you don't want to keep working the rest of your life.
3. Choose the right savings tools
In order to meet goals, you need to put your money in the right savings tools. While checking accounts are useful for daily transactions, they aren't ideal places to keep money for an extended period, as that cash typically doesn't accumulate interest.
Don't worry - Landmark Bank has you covered. You'll find many types of savings accounts to meet your needs. Let's go over them:
Personal savings account
The standard savings account is a simple way to earn interest and watch your money grow. Use this account if you want to build an emergency fund or your cash reserves.
Certificate of Deposit
A CD has a higher interest rate to provide a high-yield return to your savings plan. These accounts have higher rates because you're restricted from accessing them for a certain number of months.
CD terms range from six months to five years. If there's a goal you want to meet in five years, consider putting money into a CD to take advantage of higher returns.
Personal Money Market account
Personal Money Market accounts represent a perfect balance between standard savings accounts and CDs. These accounts come with higher interest rates but don't lock you into multi-month terms, so you can access your money if needed.
Use however many of these tools as you want.
4. Change your lifestyle habits
Simple lifestyle changes you make can yield more savings. Potential changes can include a commitment to cooking at home more often, spending less on clothes or taking public transit more to cut fuel expenses.
"Simple lifestyle changes you make can yield more savings."
According to The Motley Fool, the average American spends over $3,000 a year on prepared foods. By reducing the frequency you eat out at restaurants, you'll have more money to save.
5. Go green at home
Cutting the monthly utility bills is another way to put more money in your pocket. The U.S. Energy Information Agency reported the average monthly electric bill is $114. Luckily, you can lower electricity usage by unplugging electronics when you aren't using them and switching to more energy-efficient appliances.
Cut utility costs even further by switching to LED light bulbs because they consume less energy and last longer.
6. Stick to your budget
If you don't have a budget, you need to create one. Following a budget will help you keep track of your spending and ensure you aren't spending more than you're taking in.
Consider the 50/30/20 rule. Following this method, 50 percent of your monthly income is spent on the essentials (housing, food and bills), 30 percent is for flexible spending (day-to-day expenses that vary) and 20 percent goes toward savings.
Saving money is a continuous process. If you've fallen behind, it's OK. Use the above tips to help you get back on track. Everyone has the ability to save money.
For more information about smart ways to manage your finances, contact Landmark Bank.
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