Seven Ways to Pump Up Your Savings

In celebration of America Saves Week…

Consider stepping up your efforts to save money, February 27-March 4 – America Saves Week.  Growing a fatter savings account doesn’t need to be a pipe dream. Use these ideas to find money to save and build that savings account faster.

1. Send your tax refund directly to your savings account. The IRS reports the average American’s tax refund is more than $3,000. Deposit all or part of it into your savings account and watch it grow. The IRS allows direct deposits into one or more accounts, such as a checking and savings account, or into an Individual Retirement Account (IRA). You can also use it to purchase up to $5,000 in Series I Savings Bonds. Be sure to avoid rapid refund loans so that all of your refund is available to you to spend or save.
2. Pay off high-interest debt. Once you reduce your debts, especially credit card debt, you can start to accumulate wealth. To show you how to pay down your debts faster and save money on interest payments, go to www.powerpay.org  This free resource developed by Utah State University Extension gives you comparisons among paying off the highest interest rate debt, shortest term debt, or least balance debt first. You can then make your choice and power pay your way to debt freedom.
3. Shop for a better interest rate on your savings account. Banks and credit unions occasionally offer a higher interest rate for a period of time. Look for these special offers. Ask about minimum balances and fees. You don’t want fees to offset what you’re earning in interest. You might be able to negotiate a higher rate with your current financial institution if you just ask.
4. Look for spending leaks in your everyday purchases. You’ve probably heard about the “Latte Factor”, e.g. the cost of purchasing a coffee beverage every day. Also consider the cost of buying soft drinks, bottled water, energy drinks, cigarettes, fast food, snacks, movies, or other items several times a week. Purchasing any of these half as often will give you money to add to your savings account instead.
5. Consider debit or credit cards that incorporate incentives for savings. This might include an account that rounds up the purchase cost to the nearest dollar amount and deposits that extra amount in your savings account. Others may offer cash-back rewards that you can pump into your savings account.

   

6. Explore on-line bank accounts.  They don’t have physical branches to maintain, so often they pay higher interest rates. Just make sure any accounts are insured by the Federal Deposit Insurance Corporation (FDIC).
7. Pay Yourself First is the sure way to pump up your savings. That means depositing a portion of your income into savings at the beginning of the month, then living off the rest. And, automating those deposits makes it even easier; then you don’t have to think about it. It’s done and your savings is pumping upward.