Although there are no magic tricks to make you into an instant millionaire, there are a few ways you can learn how to build your money in no time. No matter how much debt you have or how little income you make, anyone can figure out how to make money grow in savings account with the right financial plan. If building savings is your goal, then these nine easy steps will help you get there.
1. How to Increase Your Savings with a Budget
Making a budget isn't difficult, but it can seem daunting if your personal finances need a big overhaul and you're desperately trying to build wealth. A helpful budget app to get you on the right path, but the most important thing to remember is to make your budget realistic. When you're trying to decide what to cut from your current spending, look for things you know you can live comfortably without. That means getting rid of your magazine subscriptions, cable, home phone, trips to the nail salon, or anything else that's more of a want than a need.
After you've made those cuts, divide your income into three piles: one to pay your bills and basic necessities with, one for your savings account, and left over extra cash just for fun. Too strict of a budget will drive you crazy, and the best way to maintain good financial habits is by rewarding yourself, even if it's just with a fancy latte or new outfit from time to time.
2. How to Build Money by Setting Goals
Even if you make the most amazing financial plan in the world, without setting a specific saving goal in mind, the chances of you actually sticking to your budget are pretty slim. Do you want to save up to buy a home? Pay down your student loan or credit card debt? Quit your job so you can backpack around Southeast Asia for a year? Build retirement savings? Create an emergency fund? Whatever your goals are, assign price tags and deadlines to give your budget purpose and to keep you motivated while saving money.
3. How to Build Savings Quickly: Set It and Forget It
The great thing about online banking is that for almost everything, you can set it and forget it. If you want to allocate 10% of your income for retirement savings and 5% to your down payment fund, set up transfers every paycheck so that money goes exactly where it needs to automatically. This will help build savings by reinforcing the habit of paying yourself first, and will save you time and effort as well.
4. How to Maximize Savings by Avoiding Credit Purchases
Many people are wary of using credit cards since it can lead to hefty debts if not used responsibly, but not only are they generally more secure to use than debit cards, they can also make you money that you can put directly into savings. Depending on the cash back credit card you get, for every dollar you spend, you'll get money back either directly onto your card or in check form. Now that's just easy money! As an added bonus, using credit cards responsibly will help raise your credit score, lower your interest rates, and save you money down the road.
5. How to Make Money Grow in a Savings Account Using Your Tax Return
If it's not tax season, write-offs may be the last thing on your mind. However, if you want to maximize savings using your tax refund at the end of the year, you should always be thinking about possible deductions. For instance, if you take transit daily, you may want to consider buying a monthly pass instead of individual trip tickets because passes can be written off. Same with donating to charities, as long as you keep the receipts and the charity is government registered.
6. How to Build Your Money by Knowing Your Worth
Although sometimes you might just be thankful to have a job, it's important to know your worth and be paid accordingly. Do some research to see if you're being paid the median salary for your current role, and if not, it might be time to ask for a raise or look for a new job that pays better. Remember, the more money you make, the more money you can put into a savings account.
7. How to Make Money Grow in a Savings Account by Getting a Side Gig
Many people these days have second jobs or side hustles to supplement their full-time income, and it's a great way to accelerate your savings, too. Are you a natural at crafts? Maybe you should consider selling some of your crafts on Etsy. Do you enjoy concerts and sporting events but don't want to pay for them? Why not find a part-time job at night working at the stadium to maximize savings?
8. How to Maximize Savings by Investing
Putting extra money into savings is important, but to make sure that money grows or even just maintains its worth over the years with inflation, you need to start investing with a good investment strategy. The more you save, you need to make sure that big chunk of change is put to good use, and that might mean putting it into GICs, bonds, stocks, mutual funds, or other investments in the money market.
9. How to Build Money Your Money by Making Sacrifices
Above anything else, the oldest trick in the book to build up your savings account is to make some sacrifices with products and services. That might mean cutting some creature comforts from your life for a while. It might mean cutting back on eating out or participating in social activities. No matter what, at the end of the day, all of those sacrifices will be more than worth it. Not only will you be a heck of a lot richer for doing it, but you'll never have to waste another night losing sleep worrying about money.
You don’t need a financial advisor to learn how to build your money. If you are really serious about getting on the right track financially and building wealth, these nine tips can help teach you how to make money grow in a savings account. Regardless of your age or current financial situation, right now is always the right time to start curbing those bad spending habits and planning for a richer and more fulfilled future.
Jessica Moorhouse is the author of Mo' Money Mo' Houses, the personal finance blog with a dash of sass. Originally from Vancouver, she now lives in Toronto with her husband and works full-time in marketing and advertising. Besides being an avid traveler, she also loves to read (she's in two book clubs), plays pub trivia, and eat cupcakes.