How To Grow Your Bank Account In 8 Smart Steps
Interest rates are always expected to rise more than once, which means it will cost more to borrow money. Unlike in other times, pricier loans probably wouldn’t come with higher savings yields this time around either. If you want to know how to grow your bank account this year, you can’t rely on your bank account to do it for you. But the good news is that, there is plenty you can do on your own to help your funds get a little extra weight this year and keep it on this time. Read also How To Save Money Every Month With These Simple Monthly Savings Tips
Growing Your Money Through Banking
It is great having money in the bank because you can see yourself making progress towards your goals. How do you grow your bank account? And maybe even double your money in there? We already know the formula of Save more and spend less. But that idea alone is usually not enough to change your behavior without concrete action steps. Before you get started, it’s wise to think about your goals, the things you want, and why you want them so that you will be more motivated to go ahead. Read also How To Achieve Your Financial Goals Easily As Couple
How To Grow Your Bank Account Fast
1. Pay Yourself First
One of the most important steps on how to grow your bank account is prioritizing savings. You probably know exactly how much you spend each month on your rent or mortgage payment. You need to make that payment or you sleep out on the street. Can you say the same about the money you put towards your financial security?
To “pay yourself first” literally means making savings a priority. When you get your paycheck or salary, you may be tempted to pay bills, buy groceries and spend a little cash while saving what is left over at the end of the month. But if you pay yourself first, you put a portion of your pay into savings and then figure out how to live on the rest. A vague desire to save money wouldn’t get you where you want to be. You need to set specific amounts and execute a plan of action, preferably automatic, that works toward that goal. Read also How To Pay Yourself With Ten Percent Paycheck Savings Every Month
2. Stick to Budgeting and Automation
You can’t do your bank account any good until you take inventory of what is coming in and what is going out of your financial life, so create a budget. Awareness of how much you are spending and where your money is going or learn how to create a budget. This makes it easier to adjust the way you spend your money. It is recommended to automate your savings. For cash-strapped persons that can’t find room in their tight budgets to save money, create a separate bank account that you have limited access to, log into your payroll account through your employer account and adjust your deposit to put 1% into the new bank account. Spend whatever that is deposited into your normal account, not the external one of course. Once it feels easy to live on what is left, you can now increase that 1% to 2%, 2% to 3%, in that order. This is a great strategy on how to grow your bank account fast. Read also 28 Best Money Habits To Help You Grow Your Bank Account
3. Start Banking at the Right Bank
If it is been a while since you took a look at your current bank’s competition, now is an excellent time to see what else is out there. One of the best ways on how to grow your bank account is to review your current bank’s interest rates and any fees and charges related to your accounts, then shop around to see where you can get a better deal. This is a great time to compare banks to see which offers better services to enhance the growth of your accounts. In the wake of banks slashing and ending fees for overdraft accounts, these moves are pressuring other banks to take similar steps. Remember that you don’t necessarily have to select one financial institution for all of your accounts. You can pick one bank that’s best for the type of checking account you need and another bank for the best type of savings account that you want as well. Read also 5 Important Good Credit Card Habits To Improve Your Credit Score Daily
4. Eliminate or Cut Down Debt From Your Accounts
It is true that you need to have a reliance of savings to stand between you and financial catastrophe. Once you achieve that, you should however, commit every other money you can spare to severing what is holding you back. First and foremost, the best way on how to grow your bank account is to pay off your debt. This sounds counterintuitive, but over time you are going to waste so much time and money paying high interest rates. Don’t even bother having more than a simple emergency savings until you have all of your debts paid off because you are just working against your long-term financial health when all of your money is going towards interest payments. Do yourself a favor by paying off your debt first and then save. you might actually not have savings when you have debt to pay. Read also 15 Simple Budgeting and Debt Management Strategies To Become More Financially Stable
5. Consolidate Debt If Still You Can’t Payoff
Eliminating debt is an easy thing to suggest and a hard thing to do. You can start by gathering your high-interest debt from your credit cards into one loan that costs less to finance over time. Try to apply for a lower-interest loan to pay off your consolidated debt. You will reduce the interest you have to pay and you will be debt-free much sooner in that way. Considering the average interest rate for a personal loan and credit cards, consolidation might let you steer a whole lot of cash that you would have spent on interest charges into your bank account instead. How to grow your bank account is not far beyond reach if you consolidate your high interest debt. Read also 3 Best Salary Negotiation Tips To Help Secure A Higher Salary
6. Boost Cash Yields
Currently, savings rates are so low that yields are barely noticeable even if you have thousands of dollars in your account. The big gains are in stocks, but in between the lines are saving channels such as Certificates of Deposits, which generally deliver the highest guaranteed returns a bank can offer. Certificates of deposit are interest-bearing savings accounts that can be held for a period of time. You are allowing your money to grow while in this account until it matures. If you want to keep your original deposit and the interest it has accrued, you can do so, or you can transfer it to another certificate of Deposit.
Apparently, one strategy for maximizing gains while increasing access to cash you might need is to create a “CD ladder,” CD ladder puts money into CDs with different term lengths and frequently renews short-term CDs to CDs with longer terms and higher rates as well. You should look into that if you want to know how to grow your bank account. With rising interest rates in mind, you could transfer maturing CDs with lower rates into CDs with a better annual percentage yield. In the meantime, even if interest rates fall, you can still benefit from the higher rates on your older CDs until they mature too. Read also 7 Practical Daily Financial Habits That Will Positively Improve Your Life
7. Increase Your Income
The other side of cutting costs is to increase what you bring in and there are several ways to do that. Unfortunately, it takes time to earn more money, but hopefully, you won’t need to do it forever. One quick way to earn more is to add part-time work. Taking on another job might give your bank account the boost it needs. You may even look into negotiating your salary or switching jobs to secure a higher paycheck, especially if raises have been dormant or nonexistent at your current job. Keep improving your skills to demonstrate your value to employers if you would like to move up the career ladder. Read also 16 Best Budgeting Tips For Singles That Will Lay The Foundation To Achieve Future Financial Goals
In this digital era, you can easily make some extra money with the click of a finger to grow your savings. You can start your own business as well, as an entrepreneur, you will have more control your owner destiny, as well as more upside potential. You can manage your risk by starting part-time on the side and then transition to a full-time job as things pick up well. While working smarter as well as harder, how to grow your bank account can also include selling some belongings or even renting out a room in your home. Read also Financial Literacy Strategy To Build Sustainable Wealth
8. Put Your Money to Work
On how to grow your bank account, once you have built up your bank account, start earning more on the money you have saved. This wouldn’t make or break you financially, so why leave money to lay idle? Make sure you are earning a competitive rate on your savings, switching to a high-yield savings account if necessary and use certificates of deposit (CDs) as mentioned above and money market accounts to earn more interest. Read also 10 Best Ways To Build Wealth Quickly With Or Without Money
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