With the cost of living going up all over the world, it is becoming increasingly difficult for people to put money aside for a rainy day, an emergency, their children’s future, or retirement. But it is important to realize that you are in control and you can work towards making your money grow, even when things are a bit hard economically. So, if you are hoping to grow your savings in 2022 for yourself and your family, continue reading for a few tips on how you can try doing so.
Invest Some of Your Money in Forex
If you have thought about investing your hard-earned money, you have likely thought about giving the stock market a try. But if that feels too risky or you are just unsure about how successful you would be at it, there is another option that is worth your consideration, and that is the forex market. In this market, you exchange currency pairs instead of stocks. So, you basically track the behaviors of various currencies from around the world and then make strategic trades based on how you think the values will fluctuate at any given time. Like any other investment strategy, it takes time to learn forex trading Kenya, and to gain the confidence to start trading, but once you get the hang of things, you might love it.
Put Your Money in an Interest Earning Savings Account
Do you have your money in a bank account that doesn’t currently earn any interest? Then one of the simplest things you can do to grow your savings is switching to an account that does! And you might be surprised by the various options that are available. It’s just a matter of figuring out what types of accounts are available at banks in your area. Then, you can watch your money grow without needing to do a thing. Plus, if you want to avoid the risk of losing money with other investments—like the risk that comes with trading stocks—this will probably be the better path to take.
Get Rid of Unnecessary Subscriptions and Create a Budget
Another way to save more money without needing to make drastic changes is by looking at where your money is going every month. What are your typical expenses, and are they worthwhile or can you cut back on the amount of money that you spend? For example, a lot of people realize that they’re paying for subscriptions they don’t use enough to justify the cost. Perhaps you used to need a product or service that you’re subscribed to, but that’s no longer the case. By simply canceling those unnecessary subscriptions, you might save a good amount of money that you can put into your savings account each month. So simple, right?
Finally, in the same way that you’d look for subscriptions that you no longer need, you can also create a whole new budget whenever you’re ready to spend your money more wisely. You could get rid of all of your subscriptions and still be spending too much, after all. So, based on your income, create a budget that will allow you to put more money aside on a regular basis, even if it is a small amount. Over time, that amount will grow, and you’ll have more than you started with.
Most adults have trouble saving for the future, according to a recent survey by financial services company Bankrate. Their study found that 20% of Americans don’t save any of their annual income at all. For those working abroad, saving for the future often takes second or third priority, as living expenses and sending money back home are more important.
However, by not saving for the future, many young adults are setting themselves up for financial problems in the long run. One simple way to start setting aside money is to open a savings account. Savings account, unlike checking accounts, do earn a certain interest (called APY, annual percentage yield). As a result, a savings account can be a good vehicle for growing your money slowly over the years. Here are the top ten reasons for opening a savings account.
Perhaps the biggest advantage of having a savings account is that the money you save grows. When you open a savings account, the balance you keep earns an APY, annual percentage yield. Most checking accounts don’t pay interest, but savings accounts can earn upwards of 2% APY. That’s better than nothing!
Set aside money for emergencies
A savings account is a great way to set aside an emergency fund in the event that unexpected expenses happen. Financial experts recommend having three to six months of living expenses saved in the event of an emergency. Car repairs, hospital bills, or home renovations are all big costs that may come up suddenly. Invest a small amount of each paycheck in your savings account to take advantage of the APY and have money to fall back on when you need it.
Protect your money
The financial crisis in 2008 has many consumers looking into alternative investment opportunities like cryptocurrency. However, the solution to protecting your money may be much simpler than Bitcoin. Savings accounts protect your money in the event of a financial crisis. “The Federal Deposit Insurance Corp. insures the money in a savings account up to $250,000, which means your money is protected even if your bank goes under. Other investment and savings options, such as mutual funds and bonds, typically aren’t FDIC insured, whether or not you purchase them through a bank.” If you’re worried about the economy, a savings account is a much better option to burying your cash in the backyard.
Create good money habits
A savings account is a good incentive to start practicing good money habits. In addition to setting aside a little each month for emergencies, it can also be a vehicle for creating better overall financial stability. When money is readily available, be it in your checking account or as cash, it tends to burn a hole in your pocket; spending becomes harder when your funds are invested in a separate account that you’ve designated as “savings.” The psychology of having a savings account helps create overall financial stability that is a little more difficult when you have ready access to cash.
Keep your cash accessible
While a savings account is a good place to deposit cash you don’t need immediately, it’s equally good if you need to access funds quickly. “If you need to spend money, it’s quick and easy to transfer funds to a checking account (transfers are virtually instant within the same bank). Other types of accounts, like certificates of deposit (CDs), may restrict your ability to move money quickly.” Some savings accounts have a limit on certain types of transfers, but going to a teller or ATM for cash is relatively unrestricted.
Give yourself overdraft protection
Many overseas workers and expats send the majority of their money back to their home country bank account, leaving the bare minimum in their overseas checking account for living expenses only. A savings account can be a good backup for overdraft protection. If a check or debit from your checking account leads to a negative balance, linking your savings account to cover the difference can mean saving money on expensive fees and penalties. Use a savings account to help manage money between different accounts without the risk of going into the red.
Save for specific goals
Opening a savings account is free. That means it’s feasible to open multiple savings accounts to help organize your finances. Some people use various savings accounts to budget better toward long-term goals, dedicating accounts in specific categories. For example, you might have one account for emergencies, one for education expenses, one for a down payment on a house, and one for a wedding or other event. Savings accounts can become a good way to keep your budget in check while growing your funds toward a financial goal.
Savings accounts are free
It bears repeating: savings accounts are free to open. However, there are some secondary or hidden costs of which you may not be aware. Some banks may charge monthly fees for keeping your account open, such as maintenance fees. Be aware of excess transaction fees if you’re making more than six transfers a month in and out of your savings account. The biggest cost, potentially, is hidden “opportunity costs” – the cost of putting your money in savings account instead of doing something else with it, like repaying a loan or investing in the stock market. Opportunity costs aren’t necessarily bad, but they are important to think through when setting up your account.
Circumvent needing a credit score
When you move overseas, you lose your credit history. Establishing the credit you need for a loan takes time. A savings account, however, can help you avoid the need to establish a high credit score. “When you purchase something on credit, you are paying for the freedom of being able to get the item right away, although you don’t actually have the money on hand to purchase it. If you amass a decent amount of money in a savings account, it permits you to purchase some things that you desire without having to rely on a loan or use credit and possibly lower your credit score by doing so.” If you’re planning to live overseas for the foreseeable future, invest early in a savings account to make sure you’re prepared for big expenses down the road.
Savings accounts have minimal maintenance Another big advantage to having a savings account? These bank accounts have few maintenance requirements. With the exception of maintenance fees, which you can avoid with a bit of research, you don’t have to do much to keep your savings going. “Most savings accounts have the option of setting up automatic transfers from a checking account. This automated savings means you don’t have to remember to transfer money to build up your financial cushion.” Deposit your money and watch it grow in protected account while keeping your other accounts in the black.
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