3 Techniques for Growing Your Savings Account

By Jeffrey SteeleLifestyle and BudgetFOXBusiness

For many, saving cash is an impossible task. They've tried budgeting, jotting expenses in diaries, reducing indulgences. Nothing works. Their wallets remain as flat as a Nebraska cornfield prior to planting.

Continue Reading Below

It's time to try a different tack, and the following three-step approach to savings is one that can yield success for many people. If you're one of those with problems growing your savings account, try following these steps.

Step 1: Grow your saving account by earning more

Many people try to save more by spending less, but can never quite pull off the task of reducing their cash outflows. Spending is just half the equation. The other half, of course, is earning. The more money you can bring in, the less mindful you have to be of pinching every red cent.

Even as the oh-so-slow recovery creeps along at a glacial pace, folks are managing to earn more in various ways. Moonlighting at a second job is the choice of some. Others are taking college or vocational school courses at night toward a degree or certificate that can put them in higher-paying jobs. Still others are renting out extra space in their home to boarders. With another source of income, the idea of saving isn't so daunting.

Step 2: Be strategic, not tactical

All too many fail to consider the impact expenditures -- often large ones -- have down the road on other aspects of their financial picture. They save tactically, rather than strategically.

Taking a strategic approach means looking not just into the immediate future but years ahead. You have just bought a home, committing to 30 years of mortgage payments. If you also buy the new car, how much will be left of your paycheck once you're footing the car payments? Would it be better to buy a used car instead? How much will the additional repair and maintenance costs on a used car set you back? Examining the totality of your financial situation rather than considering each individual expense narrowly can facilitate sound decision-making.

Step 3: Set goals for your saving account

One common trait of many successful savers is the willingness to establish savings goals, and then work toward and meet them. Looking a bit into the future, they decide that they will try to hit $1,000 in savings in six months, and $5,000 in savings by a specific date two years from now.

Just having a specific sum and a specified date to accumulate that amount is enough to crystallize attention on the goal, and get them moving toward it. Having reached their objective, they find it wasn't so tough, and set another one.

Pretty soon, their once-barren savings account is showing some gains, and they're on the way to a lifetime of successful saving.

The original article can be found at SavingsAccounts.com:3 techniques for growing your savings account