January 9, 2024
The new year is upon us, and we are all trying our best to stick to our resolutions. One of the most common financial resolutions, and the most difficult, is saving more money. Especially in today’s economy, battling inflation and other financial setbacks, increasing one’s savings is no easy feat.
So, which behavior can help increase savings in 2024? Review your monthly bills and see what expenditure you’re willing and able to eliminate.
Reduce Discretionary Spending
If you are trying to increase your monthly savings, the most effective way is to reduce discretionary expenditures. These are purchases that you may enjoy but are not necessary. This way, you can add that dollar amount to your automatic monthly transfer into your savings account!
Sound impossible? Here are some examples of extra expenditures and ways to reduce or eliminate them this year:
Entertainment Costs
Do you have cable? Do you use it? Services such as Netflix, Peaco*ck, or Hulu are often cheaper than cable, especially if you only use one of them.
Consider canceling your cable service for a year and putting that extra money toward your savings! Decide what shows, movies, etc., you actually watch, then decide which entertainment service best meets your preferences.
Dining/Ordering Out
Going out to eat is expensive, especially in today’s economy. If you’re one of those people who orders lunch at work every day or every week, consider reducing it drastically! You’ll be surprised how much money you’ll save.
This also pertains to buying coffee from a café. If you do this on a regular basis, you are spending far more money than you think! According to a 2022 survey, some Americans spend up to $40 monthly in coffee shops. You could be putting that $40 a month in your savings account!
So, which behavior can help increase savings? Eating at/from restaurants less AND making your coffee at home more!
Grocery Shopping
No, we’re not suggesting you stop buying groceries! On the contrary, you will need to buy more groceries if you are dining and ordering out less. The trick to saving money on groceries is to shop at cheaper stores, purchase seasonal produce, look for sale items, and use coupons whenever possible!
If you are trying to increase your monthly savings, a more mindful approach to grocery shopping is one of the best behaviors you can employ this year.
Other than reducing discretionary spending, which behavior can help increase savings toward your goals? Putting your money in an interest-bearing account!
Interest-Bearing Accounts
If you aren’t taking advantage of the interest-bearing accounts provided by your credit union, you are missing out! Depending on how much you are willing and able to put away, you could be earning substantial interest on your money. If you are trying to increase your monthly savings, consider opening one of the following accounts at your credit union:
Money Market
You can earn higher interest rates by keeping money in a Money Market Account. Your credit union will require a minimum deposit, but when your goal is to save more and earn more on your savings, this account is a great choice! As of December 18, 2023, the average money market rate is 0.64%, according to the FDIC.
Certificate of Deposit (CD)
If you’re okay with having money locked away for a specified period, consider opening up a CD at your credit union! According to the FDIC, the average monthly rate for a 6-month CD is 1.49%, and a 1-year CD averages 1.86%! Clearly, a certificate of deposit is an excellent way to increase your savings in 2024!
If you are trying to decide which behavior can help increase savings for you this year, there are plenty of options to choose from. Whether you reduce your spending or open an interest-bearing account, you’ll notice an increase in your savings. Reap the benefits of having more money to put toward your goals!
