Chijioke Agabi and Kunle Ahmed got their jobs at the same time in the same organisation. They earned the same income and were promoted at the same time. After five years of working, Ahmed told Agabi he had built his own house. Agabi was surprised that Ahmed could build a house while he had not even been able to buy a plot of land.
But what he did not know was that Ahmed had opened and maintained a savings account with his bank.
Looking at his spending culture, Agabi discovered that he was not a disciplined spender. Each month, he earned his salary, he spent it as it came thinking he was financially buoyant. He saw himself as a nice guy and was always giving to people and places that were not yielding any returns.
A major difference between a financially disciplined person and a frivolous spender is the ability to save for a rainy day.
Often times, when people lose their jobs or run into a financial emergency, they are usually stranded because even though they have been earning regular income, they actually have no savings in place.
A report by foxbusiness.com gives some tips on how to increase your bank savings.
Assess where your money is going
Whether you’re looking to build up an emergency savings fund or contribute more to your retirement plan, saving more money starts with self-awareness.
“You have to give yourself a honest assessment of where your money is going,” says Erin Constantine, a senior vice-president at Wells Fargo. “If you’re putting money away but withdrawing it to spend at the end of the month, you’re not really saving.”
That assessment can be a rude wake-up call to start setting a monthly budget, a move that is difficult at first with the need to get spending under control.
“Budgeting can feel very intimidating,” Constantine says. However, the era of mobile apps and online banking alerts can help you overcome those initial fears. McBride says 24/7 online and mobile access and a range of different mobile applications make tracking your spending easy.
There is no excuse not to know where your money is going, McBride says.
*Eliminate unnecessary spending
Once you have a budget in place, it’s time to look for opportunities to reduce your overhead costs.
“It’s a lot easier to cut spending than to increase your income,” McBride says. “That’s how you’ll carve out the ability to save on a consistent basis.
“Cutting that spending can rely on small steps, too. The Bankrate lunch savings calculator shows that even something as simple as taking your afternoon meal to work each day rather than eating out can add up to big savings over time. Consider recurring charges such as your cable or phone bill to determine if there are alternative plans that can trim your expected monthly expenses.
Another way to shrink spending is to alter the way you pay for purchases on your shopping trips.
Set your saving goals
You can’t get somewhere if you don’t know where you’re going. “Set a goal,” Constantine says. “The feeling of saving toward something can feel very motivating. “However, your savings goal does not have to be huge. Constantine compares taking the first steps of a savings plan to beginning an exercise programme. “You’re not going to immediately wake up every morning at 5am and run five miles,” Constantine says. “Find a realistic amount that you can easily adjust into your budgeting pattern, and then increase that amount over time.”
*Jump-start your savings with extra cash
As soon as your pay arrives, it’s time to save. “You have to automate your savings,” McBride says. “If you wait until the end of the month and try to save what’s left, there’s typically nothing left over.”
“That automatic payment towards your retirement or your emergency savings is just like any other bill,” McBride says. “You’re getting it taken care of right off the bat when you receive your pay.”
You can also pay yourself first when unexpected cash flows into your savings account.
Constantine recommends looking for opportunities to jump-start a savings plan with tax refunds or year-end bonuses.
“Look for a time when you have a little bit more money coming in, and put a portion of that cash towards your savings goal,” Constantine says.
*Give yourself regular checkups
Having a healthy savings account is just like maintaining your physical health.
“You need that regular scorecard that keeps track of your spending and helps you reconcile that to your net pay,” McBride says. “That’s how you’ll really determine if you’re living within your means.”
“You’ve got to hold yourself accountable,” McBride says. “If you overspend one month, that impacts your progress towards your goal. The accountability factor forces you to find a way to correct yourself if you’re going off course.”