In any testing financial period, there is often a tendency for people to adopt habits of austerity to ensure that they can come through the tough times. Indeed, it can occasionally become something of a competition that people have with themselves and others; can you save more this month than last? Can you save more than your friends? People will even adopt new ways of cooking and eating; entire types of cuisine have sprung up in times of increased scarcity, and you’re rarely far away from the next “recession-proof recipes” article.
As we look at a global economic slowdown, you can expect to read more in the coming months about the importance of saving, so to help you get a head start on the rest, it is worth looking at some sensible ways to maximize your savings. The following are a few ideas that can make a big difference to your bottom line.
Look at switching your bank account
If you want to look back in a year’s time and see that your bank balance is healthier than it was before, it’s important to use every advantage you can find. This may involve keeping your money with a different bank in the future, as new customers can rely on preferential deals which will (for example) pay higher rates of interest for the first year of the account. Some will even give a cash lump sum as a gift for joining – which can help you get started with your savings total.
What are you paying that you don’t need to pay?
In a surprising number of cases, people don’t put as much money aside as they could simply because they aren’t controlling their outgoing costs as much as they could be. This is often down to something as simple as being on the wrong energy plan or not having changed their insurance provider in years. Along with more structured tax planning, this could see you wiping out large chunks of needless spending, so it’s worth an audit of all your outgoing costs.
Speak to your company about 401k contributions
If your main concern in your current job is getting a monthly paycheck, then you might not be getting the most out of a benefits package your company is probably offering. Many businesses will match a certain percentage of your wage if you’re putting that amount into a 401k or similar retirement savings account. Usually you need to opt into plans like this, and they aren’t always well publicised, so it is worth talking to HR at your place of work to see if there’s anything you could be benefiting from.
“Speculate to accumulate” with debt
When you make the minimum payment on a credit card or a loan, you will avoid additional charges, but you won’t keep the lender from placing interest on the principal – and depending on the amount you have borrowed, your overall balance could be going up. Paying a card off entirely, or restructuring a loan by paying a lump sum, can drastically reduce your monthly outgoings. It’s money you won’t be putting directly into savings, but it will increase the amount you save in the long term.