If you want to multiply savings while you are paying off your debts, you need to be ready to commit to it. While we are sure that this is possible, we are also certain that it will be challenging. There’s no doubt about that.
This is probably why a lot of people are not really saving a lot of money nowadays. Early this year, it’s revealed that despite a strong economy, almost 7 out of 10 Americans have less than $1,000 in their savings account. And 45% also said they don’t have anything in their savings account!
It’s no wonder a lot of people are struggling after the pandemic hit the country hard.
Of course, we are getting reports that some Americans have woken up to the truth that they need to get more aggressive so they can multiply savings. And it’s impressive because they are putting aside more money nowadays. But there are some households who have acted too late. They weren’t able to save anything and the recession already cost them to lose their jobs.
If you are one of those people, how will you save more if you have limited finances? It’s just the same as trying to save more money while you are in the midst of paying off your debts. Even if your finances are restricted, it’s possible to save money. And if you can accomplish that, you know that you can do anything that you set your heart out to do.
3 strategies to multiply savings faster
The thing is, trying to multiply savings doesn’t have to be too difficult even if you have limited finances. Whether it’s caused by a job loss or monthly debt payments, you can successfully save money. You just have to be determined enough to do it.
Of course, you also need to know the right strategies that will make it easier to meet your saving goals. Because there will be a lot of temptation along the way. Once you see your money increasing, you will be tempted to use it for something else. But if you implement these strategies, you should be able to stick to your plan.
Know your reason
The first strategy is to be clear about why you want to multiply savings. What is the reason why you want to increase your savings? We all know it’s one of the best ways to secure yourself so you can survive any financial crisis. Your savings can help you make ends meet when your income is compromised. Or if there is an unexpected expense, you can use your savings so you can avoid having to borrow money for it.
Admittedly, this strategy is not a direct way to increase your savings. However, this is the first strategy that you need to implement. Why? Because this is the fuel that will help you save more. Remember the temptations that may derail your plans to multiply savings? This is what you can use to counter these tempting thoughts. Thinking about the reason why, like paying off your debt faster, will help you overcome the temptation to dip into your savings. That way, you can really use it for what you intended.
Make it a habit
Another strategy that you can use is to make saving a habit. According to experts, if you do something consistently for 21 days (or over a long time), it will become a habit. That means it will be easier for you to stick to it. If you make saving a habit, it will become like second nature to you. Whenever you get some extra money, you will automatically get a portion of that to add to your savings. You do this before you spend it on other things.
You can also make it into a habit by automating your savings. This is actually a very easy way to ensure that you can multiply savings no matter what. You can even treat it like a bill so you will make it a priority.
Ask about employer match programs
This is for those who want to increase their savings for retirement. It improves your financial security, thus making sure your debt payments will be secured as well. When you know that your future is secure, you won’t have to live with the stress that comes with dealing with multiple debt payments.
So if your employer is matching your retirement savings, go ahead and take it. Maximize it! Reports reveal that people are behind when it comes to putting money into their savings account.
Don’t think too much about saving liquid cash – which is cash that you can easily get and spend. Of course, you have to put aside money to pay for your debts. But make sure you also put something in other types of savings accounts – specifically those that you’ll have a hard time getting. These will help grow your money through compound interest. It’ll lead your money to grow the longer you don’t touch it.
Tips to save more money to pay off debt faster
Now that you know the strategies that will help you multiply savings, how can you stick to it? Because we all know that increasing your savings is not an overnight thing. You have to do it consistently over a long period of time. You need to be patient enough in watching it grow.
To make sure that you will always save money, here are some tips that you can follow.
Always prioritize your spending
There’s nothing wrong with spending. But if you don’t know how to do it wisely, you’ll end up compromising your financial situation. If you really want to multiply savings, you have to learn how to prioritize your spending.
Make a list of everything that you spend for. The priority and important expenses should be on top. Anything at the bottom of the list are expenses that you can live without. If you want to increase your debt payments, do not spend on these unnecessary expenses first. Once you have paid off your debts, or at least a significant portion of it, you can think about spending on these again.
Limit your use of debt
Managing your credit can be tough. So if you are trying to pay it all off, avoid using it for now. Otherwise, you’ll be stuck in a never-ending debt repayment limbo. It doesn’t matter if you’re trying to multiply savings to pay it off. You will never overcome your debt situation if you keep on borrowing money. Not to mention your savings will never really grow since it’s always being used to pay off debt.
If you really have to use credit, make sure you use it with a purpose. And you have to know how you will pay it back. If you don’t know how to pay for the debt, it’s best for you to stay away from credit use for now.
Start as soon as you can
If you are serious about wanting to multiply savings, you have to start now. Don’t make excuses about waiting for a certain time or an increase in income before you make an effort to save more. You have to start right now. If you can only afford to save $100 a week, that’s okay. Keep doing it and soon, you’ll have $1,200 in 3 months. In a year, that would become $4,800. When you are just starting to save, the amount is not as important as your commitment to consistently save money.