Anyone would welcome the sight of a bigger balance in their bank account. Whether you want cash to fall back on in case of emergencies or are planning a pricey purchase, saving is always smart. Finding pain-free ways to set money aside that don’t require giving up an enjoyable quality of life can be tough, however. If you find it difficult, you aren’t alone: Some 21 percent of Americans don’t save at all, according to CNBC. Discover how to hang on to your cash without making difficult sacrifices below.
Get a High-Yield Savings Account
Don’t just dump all your earnings into your checking account; instead, create a separate space for savings to make it harder to access your money so you can’t thoughtlessly spend it. Look for a high-yield savings account with an interest rate of at least 2 percent. Shop around and examine different options: Online banks tend to offer the best rates. This online savings calculator gives you an idea of how much you will benefit: Just plug in the initial deposit, the number of years you plan to save, and the interest rate.
Download a Money Management App
If you’re one of the many individuals left wondering just where all their money goes, a savings app is the answer. These technologies allow you to track your spending and create a personalized budget. Some of them even offer ways to save, such as allowing you to “round up” any purchase you make and deposit that extra bit directly into savings. Check out this overview of various apps to see what different models can do for you.
Automate Your Savings
Having a chunk of change automatically moved from your checking to your savings account every month allows you to set money aside without even thinking about it — the cash is safely stowed away before you can spend it. The Federal Deposit Insurance Corporation, a United States government body, encourages this method of building a “rainy day” fund.
Consolidate Your Debts
From credit card statements to outstanding medical bills, unpaid shopping cards, and car loans, odds are you have more than one type of debt. This diversity hampers your chance at saving more because it means you are paying interest on multiple fronts. There are many useful ways to consolidate debt and cut back on these needless fees. You may even be able to secure a lower interest rate this way.
Keep Your Tax Refund or Bonus
The average tax refund for Americans in 2019 totaled around $3,000, and many people will use this money to make a major purchase, go on a vacation, or splurge on a luxury item. When possible, avoid the temptation to treat yourself when it comes to this financial windfall. Instead, stick it right into your savings account for a hefty boost. The same rule should apply for any bonus you may receive at work.
Reduce Your Mortgage Payments
People who have Federal Housing Administration loans should consider refinancing from FHA to conventional. FHA loans have drawbacks, as this Forbes article reveals; for instance, they require mortgage insurance for the life of the loan if your down payment is less than 20 percent. The same is not true for many private lenders.
Additionally, if interest rates have improved since you first bought your property, it’s very likely you will secure a lower one now. Do your research to see if you qualify for refinancing. Don’t jump on the first offer you see, but read the fine print and shop around to find the best solution for your financial needs.
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