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It’s a good time to be adding money to your savings. Read on for tips to find the cash. [[{“value”:”
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According to New York Life data, in 2023, U.S. adults aimed to save $7,435.57 on average, but actually saved $6,138.06. That’s not too shabby given the way inflation continued to hammer Americans last year.
But those who did manage to put money into their savings accounts did a great thing for their finances. In 2023, banks started raising their interest rates following the Federal Reserve’s rate hikes. So those who added to their cash reserves set themselves up to earn more.
Meanwhile, the strong savings account and CD rates that were available to Americans last year are still largely in effect this year. So it’s a really good time to be boosting your savings. If you haven’t managed to save any money so far this year, here are a few key steps to take.
1. Plan to bank windfalls
Maybe your birthday is coming up this month, and your parents and grandparents typically send you a check in lieu of a physical gift. Or maybe you expect your tax refund to arrive any minute. Putting extra cash in the bank is a great way to capitalize on today’s competitive rates, so resist the urge to spend the money that may be coming your way.
And if you’re really struggling to part with so-called bonus money that’s headed your way, compromise. If you get a $200 check from your parents, spend half but save half. If you’re getting a $1,500 tax refund, use $200 to treat yourself to something nice but bank the rest.
2. Reevaluate your spending
Cutting all fun or non-essential expenses from your budget probably isn’t doable. And frankly, that’s not a great way to live.
You may not need to order a takeout meal every three days. But if you work long hours and being able to pick up dinner on the way home from the office is a source of comfort and time savings for you, then that may not be an expense you should rush to give up.
However, chances are, there are at least one or two spending categories you can make adjustments to. Maybe instead of doing Friday night happy hour at a local restaurant where you typically spend $40 on drinks and appetizers, you and your friends take turns hosting happy hour at home where you’re spending $40 every four weeks, not each week. Or maybe you cancel a streaming service you’re watching less and less of, because your job has you working longer hours.
Denying yourself a comfortable lifestyle isn’t a great approach to boosting savings. But cutting back in a way that doesn’t really negatively impact your life is a smart thing to do.
3. Get a sustainable side hustle
Even if your main job is pretty intense, you may find that you’re able to carve out some time for a second gig. The earnings you bring home from that side hustle could then be your ticket to boosting your savings.
But to be clear, for this strategy to work, your side hustle has to be sustainable — meaning, it has to work for your schedule and lifestyle. So if you have the sort of job where you never know if you’re going to get called into a last-minute 6 p.m. meeting or be assigned a last-minute report that has you working late, then you shouldn’t accept a side job where you have to commit to preset hours at a specific location in the evening.
However, in that case, a side gig you do on your own time could be a reasonable path to pursue. For example, with apps like DoorDash, you can sign up to make deliveries at times that fit into your schedule. And if there’s a week when you can’t work at all, so be it.
Because of where interest rates are at right now, it’s a good time to be adding to your savings. If you haven’t managed to do that thus far in 2024, don’t stress or panic. Not only do you still have more than half of the year ahead of you to meet your savings goals, but a few small changes to your spending and schedule could end up leaving you with a lot more money in the bank come December.
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