Over the last week or so, I’ve written a little about small changes you can make to your savings habits to speed up your interest earnings. This is a task that is getting more difficult with the economy possible heading for a recession and with the Fed lowering interest rates. With lower yields even in the highest-paying online savings accounts, bank accounts need as much help as possible. Here’s a summary of the 6 ways I’ve determined to break the light barrier.
1. Open a High-Yield Account. Most banks are counting on your continued comfortability and settlement with interest rates as low as 0.25% APY. You can do much better than that. More »
2. Keep Your Change. Make a habit of dropping your loose change into a jar every day, and deposit the savings monthly. Try rounding all your purchases to the next dollar and transferring the sum of the remainders into the high-yield savings account. The little amounts add up over time and add to your principal. More »
3. Automate Your Savings. Set up direct deposit and automatic transfers so your money moves into savings and grows without your meddling interference and temptation. More »
4. The Expensive Coffee-Related Drink Factor. The Latte Factor® as described by author David Bach is not free of problems. Some of the problems can be conquered if you take the spirit of the concept. Reduce or eliminate a habitual, unnecessary expense and divert the funds to savings instead. More »
5. Hide Your Savings From Yourself. Try putting your savings in a different bank, with statements shipped elsewhere. Hide this account in your money management software so the balance isn’t included in your totals. Out of sight, out of mind. More »
6. Make Your Raise Invisible. Roll any increases in pay from your employer directly into your savings. A 3 percent raise signals a 3 percentage point increase to your savings. If you were saving 10% of your income, start saving 13%. More »
I am confident that in addition to these, there are many other ways to supercharge your savings. If you have any suggestions, feel free to share in the comments.
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