Maybe your goal is to increase your savings to the point that you have a fully loaded emergency fund in 2022. Or maybe you are ready for emergencies and want to save for a big vacation. If you’re anxious to see your savings account balance increase in the New Year, here are four key steps that could help you reach that goal.
1. Follow a budget
When you stay on a budget, it’s easier to keep track of what you’re spending on various expenses. And it’s also easier to see if you are going too far in a particular category. If you budget for 2022, you may find it easier to meet your savings goals.
Check out these budgeting apps that can help you better manage your finances. Or if you’d rather stick to a budget that you create using a spreadsheet, that’s fine too.
2. Treat yourself
You probably know that cutting expenses is a great way to increase your savings. It is not an easy thing to do either. You don’t want to deprive yourself of too many fun things, like take out and entertainment. And you may already be living fairly frugally, leaving you with little expense to cut.
Instead of cutting back on expenses to grow your savings, try increasing your income with a side activity. You can choose from a plethora of concerts to suit your skills, schedule, and savings goals. Think about how much money you want to make and how many free hours you have each week, and let it help you narrow down your choices.
3. Pay off credit card debt
Having a credit card balance means spending money on interest. Paying off that balance means not only paying off debts, but also having no interest accrued against you. If you’re not wasting money on interest, you can use it to boost your savings instead.
You may need to stick to a budget and get extra help so you can pay off your debt. But once you’ve freed up the money to do so, try paying off your credit cards in the order of highest to lowest interest rate. Or, see if you qualify to consolidate your debt with a balance transfer.
4. Refinance your mortgage
The less money you spend on your mortgage, the longer you can stay in the bank. Refinancing could be your ticket to a lower mortgage payment each month.
Of course, you’ll need to make sure refinancing makes sense before you go down this route. If you have a good credit rating (which likely qualifies you for a good interest rate on your new home loan) and plan to stay in your home for a while, refinancing might be a good bet. But if your credit score needs improvement and you’re moving within a year, you may want to take other steps to increase your savings and delay refinancing.
Many people aim to save more money in 2022. If it’s high on your list, follow these tips to make it easier to increase your savings and enjoy the freedom of having that financial cushion.