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Tips for Building a Savings Account by the End of the Year

Saving is important at any point in your life because you never know when something is going to go wrong. If you don’t have any savings, you could find yourself in debt paying for things you can’t afford with a credit card. Debt can easily pile up and eventually lead to bankruptcy, so it is very important to stay ahead of it with a good amount of savings.

Setting a goal to save by the end of the year can be a great way to motivate yourself to save as much as you can, and you can continue these habits into the new year. Here are some of the best ways to start saving.

Write Down What You Spend

One of the best ways to save money is to understand exactly where your money is going. If you just spend money and don’t keep track of it, you might be surprised by just how much you are spending each month. Even small purchases can really start to add up, so the first thing you should do is figure out how much money you usually spend each week and then each month. From there you’ll be able to identify where you could cut back.

For example, you might realize that you are spending a lot of money on food, so instead of buying lunch each day, you can start packing something to have. Another common place people spend a lot of money without realizing it is on alcohol. If you tend to go out and ignore your bank balance until you get paid again you probably have no idea how much you are actually spending at the bar. Adding it all up might make you realize just how much it is costing, so maybe you will decide to spend every other weekend in, or doing less expensive activities.

Making small changes like these can actually save you a significant amount, but you won’t know where you can afford to cut back until you write everything down and add it up. If it is too much to keep track of, take a look at your bank statements and organize everything by category. See how much you’re spending on food, clothing, leisure activities, and more to determine which categories you’re spending the most on.

Set Goals

Before starting your savings journey you need to set goals. If you want to reach a certain amount in a year, determine how much money you will need to save each month in order to achieve that goal. If you want to save $10,000 in a year, you need to make sure you are saving at least $833 each month. Your goal can also be a specific purchase that you want to make, like a car, liposuction, or an expensive new item of clothing. In some cases, you might make more during some months of the year than you do in others.

For example, if you are a teacher, you might work a job in the summer and make a little less than you do during the winter months. In this case, you might want to plan to save more during the winter and less during the summer. Similarly, your expenses might be higher during certain months, so you need to plan ahead for this too. If you tend to spend more during the holiday seasons, make sure that you plan to make up for that by saving more during the other months.

Make Your Savings Automated

Most banks have an option for making your savings automated, and this can be a really helpful tool if you have trouble remembering to actually put the money into a separate account. Not everyone needs to have the money in the account physically to keep track of how much money they have saved. For example, you might have $5,000 in the bank account but know that $3,000 of it is not to be touched.

If you don’t think you’ll be able to stay organized like this, or you will be tempted to spend the money if it is not in a separate account, setting up automatic transfers is a good idea. You can make them once or twice a month depending on when you get paid. Then a few days after you get your paycheck, the bank will automatically transfer the amount you choose into your savings account. This will also take some of the pressure of remembering to save off of you.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


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