When you first decide to start saving money, the concept can be daunting.
But the good news is you don’t necessarily need a large base amount to get started, which can make the process a lot easier than you might think.
Here are some super simple — and generally smarter — ways to start saving that don’t have to break the bank.
1. Open a savings account
If you’re ready to take your first step towards being a better saver, an easier way to get started and help your money grow is to open a high interest savings account with a bank.
The great thing about opening a savings account is you typically don’t need a stack of cash to get started. It can be as simple as jumping online.
But before you go ahead, make sure to look around for the type of account that suits you. Then, simply let compound interest do the rest.
2. Build a budget
Another key to creating a meaningful savings account is to ensure you are living within your means. This is where having a budget comes in handy. A budget can provide a useful personal insight into how you allocate your funds.
For those new to budgeting, it’s a good idea to look at your income and expenses. On the income side, you can divide things up into income, such as your salary, and other types of income, such as capital gains from shares or dividends.
You should then be in a position to know how much income you have to work with at any given time.
After that, the next step is to look at your expenses or outgoings. These are payments that you have to make on a regular basis.
Here, think about things such as car payments, rent or mortgage payments, food, and credit card payments. And remember to include all the “discretionary spending” things you also spend money on, such as restaurants, clothes or holidays.
3. Slash your expenses
But it’s not just about budgeting, you also need to keep a lid on your costs if you want to be an ace saver.
A helpful way to kick this process off is to examine your expenses and see how you can lower or rearrange your spending.
Another tip in terms of cutting costs is to switch to cheaper brands for clothing and food, and to take a look at your energy use and see if there are ways to use energy off-peak or move to another supplier.
4. Going old school
We live in a world where technology and a myriad of smartphone-based apps are making it easier than ever to save, even if you’ve only got $5 to start with.
Still, if you want to save on fees and stay low-risk, there’s always the piggy bank or coin jar.
Think about all the benefits!
First, it’s easy, with many people deciding to use it to keep all their loose change. (This can then grow into quite a considerable sum.)
Not only that, it’s super convenient if the animal-shaped bank is placed somewhere prominent in the house.
Furthermore, it’s very visual, which can also help to keep saving in the forefront of your mind.
5. Get out of debt
If you want to save, even by using a piggy bank, you first have to get out of debt.
Depending on how much and what type of debt you have, you could look to pay off the debt with the highest rate of interest first or get rid of the smallest debt as top priority.
Once you are debt-free, if you decide to open a savings account, make sure to choose one that includes a competitive interest rate and otherwise suits your needs. There are many online comparison sites that can help simplify the process.
