Want to save for that investment property you’ve been eyeing? Or perhaps you want to earmark more money for mutual funds and other types of investments?
If you’re working toward building wealth through a targeted investment strategy, Riverview Bank has tips and tricks to help you reach your end goal faster.
We’ll share saving strategies that will keep you in the driver’s seat on your journey toward financial freedom.
Create a Budget
A budget is essentially a strategic plan for your money. If you haven’t already done so, start creating a budget by adding up all your monthly income and deducting your monthly expenses. Be sure to also account for infrequent expenses, such as those that only come quarterly or annually.
If you’ve laid out all your income and expenses and things balance perfectly, that’s great! More likely, however, you will either be under budget (your income will be greater than your expenses) or over budget (your expenses will be higher than your income). If you’re under budget, you can set aside the extra money for your investment strategy. On the other hand, if you’re over budget, you’ll need to find areas where you can cut back or creative ways to save. For instance, you may want to consider options such as a home loan refinance or consolidating high-interest debt.
If you’ve never created a budget before, following the 50/30/20 rule can help you get started. This rule states that you should divvy up your after-tax income into three categories: needs, wants, and savings/debt. Following this budgeting strategy, 50 percent of your income goes toward needs, 30 percent goes toward wants, and 20 percent goes toward savings and/or debt.
Keep in mind, though, that the 50/30/20 budget strategy is a recommendation rather than a hard-and-fast rule. Some people choose to put 20 percent of their budget toward wants and allocate 30 percent of their budget toward saving strategies. If your goal is to save for your next big investment, you may want to plan to do exactly that.
Stay on Track
Having a budget is ineffective unless you stick to it. So once you’ve created your budget, the next step is to stay on track. There are many tools and resources available to help you stay disciplined and on budget. Simply take a few minutes at the end of each day to write down your expenses so you’ll know where you stand financially each month.
Simply track your spending with your Riverview Bank online banking and mobile app. Then create your own spreadsheet or use a calculator and put pen to paper.
Just find your preferred method of staying on top of your spending and saving and keep at it so you know exactly where your money is going. This will help you stick with your plan and see how close you are to achieving your financial goals.
Use Cash-Back Apps
Your income is undoubtedly one of your greatest wealth-building resources. But you can also earn a little cash on the side with minimal time and effort. Cash-back apps, for instance, will enable you to earn money on everyday purchases like gas and groceries.
There are many cash-back apps, such as Upside, Ibotta, or Rakuten, so find one you like. Signing up for Riverview’s Mt. Adams Benefits Checking account can help you save too. One of the benefits includes discounts on travel, shopping, and entertainment. While it may seem like you aren’t getting much, a few dollars here and there really can add up over time, allowing you to reach your next big investment goal more quickly and easily.
Utilize a CD Account
Another option for making money is to open an interest-bearing account, such as a certificate of deposit (CD) account. Either of these financial vehicles can help you grow your savings more quickly than a traditional savings account. CDs allow you to earn money on deposited funds through passive income, or income that requires no effort on your part.
A CD also offers a much higher interest rate than a traditional savings account. With a certificate of deposit, you commit a deposit amount for a predetermined term and earn a set interest rate. While you are required to leave your deposit untouched during this time, when the term is over, your return is a guaranteed amount.
At Riverview Bank, you tailor your certificate of deposit account to your needs by choosing the term and initial deposit amount that fits your budget best. If you’re looking for something a little more flexible, there is an 18-month variable-rate CD with the option to make additional deposits throughout the term.
Automate Your Savings
An easy way to grow your savings is by setting up automatic transfers to your savings account each month. Just set it and forget it. That 20 percent of your take-home pay (or whatever amount works best for you) will automatically transfer over to your savings without you having to think twice about it. Some banks even allow you to round up purchases to the nearest dollar and deposit the difference in your savings account. Think of it as a modern-day piggy bank.
Another strategy to help you save toward your next big investment goal? Avoid the temptation of linking your checking and savings accounts. If you keep the two accounts separate, you’ll be more inclined to stick with what you have available in your checking account instead of dipping into your savings every so often.
Remind yourself of the big picture and how you really want to use that money instead. It will help you keep your eyes on the prize—investing rather than spending.
These saving strategies can add up to big savings over time. If you’re ready to invest in your future, stop by Riverview Bank and learn more about our savings options. Securing a solid financial future starts by making smart financial decisions today.