As we spring clean our homes and edit down our closets to make room for new and fresh additions, it’s the perfect time to empower our bank accounts to blossom. Whether you’re eyeing a spring wardrobe addition, a warm weekend getaway, or even buying your dream home, small steps you take today can help you accomplish your goals. Here is exactly how to grow your bank account this season (without really trying).
Open a high-yield savings account.
This is a tip I share often, but it’s too important not to include. This account should be reserved for emergencies or for specific goals you’ve been saving toward.
Keeping a savings account separate from your checking account will ensure you don’t accidentally dip into your savings for everyday purchases.
So what exactly is a high-yield savings account? That means the account is paying you a higher-than-average interest rate on your cash. A savings account with a large bank like Chase, Wells Fargo, or Bank of America may pay as little as 0.01% in interest, but a high-yield savings account with an online bank like Marcus or Synchrony can pay up to 2.25%! These accounts enable your money to passively grow, and you don’t even have to lift a finger.
Set up automatic transfers.
Most of us dictate our spending habits by the amount of cash we have sitting in our checking accounts. If we sense that we have some extra cushion, we’re more inclined to go spend it on something frivolous. To avoid this temptation, set up an automatic transfer of cash from your checking to your savings based on when you earn your paychecks. If your salary hits on a bi-weekly basis, set up a recurring transfer to your high-yield savings account accordingly. Once you set this up once, you won’t have to think about it again.
Stick to cash…for now.
I’m all about using credit cards to maximize reward points, but there’s one major downside. Swiping a credit card is easy…dangerously easy. Credit cards enable frivolous spending by eliminating the emotional tug of cash leaving our pockets. So instead of relying on plastic, challenge yourself to spend only cash for the next month. Then, evaluate the results. Did you spend less this month than the last? How did it feel? If you can, keep this practice up for another month…and maybe one more after that. Once you get used to using cash, slowly re-introduce credit cards into your spending routine, but only if you can maintain the mindset that credit is limited! It’s amazing what you can save when you’re focused on spending a tangible, finite resource.
Cancel the automatic subscriptions you don’t need.
Whether you have a newspaper subscription to a publication you hardly read, a gym membership that doesn’t get much love, or a Bark Box membership that costs more than it’s worth, many of us are swimming in automatic subscriptions that we just never think about. Cutting out the excess can go a long way toward building up your bank account. Start by reviewing your account statements. Make a list of everything that gets automatically debited, and decide what you actually need to keep. Maybe you can edit down your cable subscription to the channels you really watch. Or forego the clothing and makeup subscription services for a little while. Chances are you’ll hardly miss them, but you’ll certainly appreciate the new cash padding your wallet.