Personal Savings Account | Tips To Quickly Grow Your Savings

Easy Tips To Grow Your Personal Savings Fast

A savings account is a type of deposit account that earns interest as time passes. The interest rate varies depending on the financial institution and how long you’ve had the account. silver round coins on white surface

It is great to have a savings account if you’re planning to build an emergency fund or if you’re saving up for a short-term goal. It also keeps your extra money separate from your daily funds so you won’t accidentally use them.

When you have a personal savings account, the idea of saving and growing money can feel quite stressful and daunting at first, especially if you don’t know what to do. But with just the right amount of financial planning, maintaining your account and boosting your savings can be easy. Here are a few ways to help grow your savings:

Budget and Plan Your Finances

The first thing to learn is how to budget and plan your finances. If you have a general idea of where your money goes, you can easily adjust your spending.

Keep track of all of your finances for a week or a month. List down how much money you get in that time frame, whether you earn through investments, business revenue, or your salary. Once you have an idea of your income, you can then list down your expenses. These include your fixed and variable costs.

Since your fixed costs are consistent every month, look into your variable costs. These include expenses on entertainment, subscription to various services, food, clothing, and more. Think about which one of those you can start cutting back on. Should you decide to terminate some of these subscriptions, that extra money can then be deposited in your savings account instead.

When making your monthly budget, there are lots of budgeting programs and apps that can help you out. It’s best to research their pros and cons to help you decide on what to use.

Set Some Achievable Goals To Motivate You

Set some financial goals for yourself. Whether they’re short- or long-term, they can help you get motivated to save money. It makes you change the way you view your finances and reconsider your spending habits.

You can use your monthly budget as a basis for how much you can store in your account for each of your goals. Once you have calculated this, decide on what expenses you want to save up for. It could be for a vacation trip, repairs, or emergencies.

Your financial goals should be specific, measurable, achievable, realistic, and time-bound. For example, instead of using a vague goal to motivate you, determine how much you want to have after a certain amount of time. Let’s say you want to have $13,000 after 12 months to build an emergency fund. This gives you an idea of when and how you’ll be able to plan out to reach this goal.

Add up all of your income and then subtract your monthly expenses to calculate how much you can realistically put aside for these goals. After that, you should stick to the plan until you’ve achieved the goal. You’ll get to see how much money you’ve earned as time goes by.

Understand Compound Interest and the Rule of 72

When you have money saved up in a personal savings account, you should also know how compound interest works. It’s the interest you earn on your initial principal and its subsequent interest from previous periods. This makes your saved money grow at an accelerated rate. In general, the longer you have the account active, the greater the compound interest you get.

If you want to know how much your investment will grow over time, you should be aware of the Rule of 72 and use it to your advantage. It’s basically a formula used to determine the number of years you need for your invested money to double.

To get this, simply take 72 and divide it by your investment’s projected return or annual interest rate. You’ll have the approximate number of years you need for your money to grow.

Saving money doesn’t need to be complicated. By planning out your finances, you’ll be able to quickly grow your savings and achieve your goals in life. Start saving today and have the financial freedom that you deserve.