Ways to Protect Your Savings
Many people put money into savings each month, and some people end up dipping back into that money to cover bills or fun spending. It can be frustrating to see that your savings are not growing, even when you think you are putting money aside each month. You are not really saving if the balance is not going up each month. You need to figure out why your savings are not growing and do what you can to protect the money already in your account. Here are five ways you can protect your savings so that you can really start to see a difference in your financial picture.
Stick to Your Budget
This seems so obvious, but it is a simple truth. If you follow your spending plan each month and stick to it, you will not dip into your savings account. If you do not have a budget, it is not surprising that you end up borrowing a bit here and there to cover things like groceries or utility bills. If you currently do not have a budget set one up today. This is the best way that you can get control of your spending and stop dipping into your savings account. Checking in on your spending each day can really help you stick to your budget.
Set Up an Emergency Fund
The unexpected does happen from time to time and you can end up with an expense that you have not planned for like three car repairs in six months. An emergency fund can help you cover these expenses without dipping into your savings for things like your home or your vacation. When you do use your emergency fund, you need to replenish it by adding money back into it over the next few months. This may mean slowing down your savings, but at least you are not pulling money from it.
Move Your Savings to Another Bank
When you are worried about overdrawing your account, it is easy to transfer money from your savings account into your checking account to cover it. While you should have your emergency fund easy to access like that, you may want to move your savings account to another bank where it will take more effort and more time to move the money. This can stop you from making impulse purchases and knowing that you have the money in savings to cover it.
Stop Using Your Credit Cards
It does not make any sense to be putting money into savings when you are using your credit card and carrying a balance. You are paying more in interest each month then you would earn in interest on your savings account. If you really want to protect your savings, you need to clear up any credit card debt that you have. Make a plan to get out of debt today and stop carrying your credit cards with you, so you will not be tempted to use them.
Get Serious About the Way You Spend Money
If you are struggling to get by each month and dipping into savings because of spending, you can protect your savings by sticking to basic spending rules. There are a number of strategies you can employ including switching to cash for your shopping, couponing, and only buying things you need when they are on sale. Additionally, you can work on reducing your monthly bills to free up more money to cover your everyday expenses. The more proactive you are about how you work to save money on what you are spending, the more successful you will be at protecting your savings account.