Making saving an important part of your everyday life provides the foundation for your financial freedom in the future. The more you put aside, the better off you’re likely to be financially. With that in mind, here are four tips for increasing your savings in 2016.
Contribute More Into Your 401(k) Plan
If you’re currently not making the most of your 401 (k) plan, it’s high time to consider increasing your contribution to help you save more money. Most employees in 2016 can contribute into their 401(k) plans up to $18,000, while those aged 50 and above are allowed to add an additional $6,000. Because what you contribute is deducted directly from your paycheck, you’ll never miss it because you won’t see it in your bank account. As they say, out of sight, out of mind.
Opt For Less Expensive Options
You can increase your savings without affecting your lifestyle drastically if you go for less expensive options of the things you use daily. For instance, instead of eating out, consider carrying healthy packed lunch to the office or school. Brew your own coffee instead of passing by your local coffee shop every day after work. In addition, you may also want to consider ditching your favorite brands for generics, and buying your everyday items in bulk when discounts are offered.
A few bucks here and there may not seem much to you, but over time, they will add up quickly into significant savings. Imagine how much extra money you’ll have in just one year if you save $6 on lunch, $4 on coffee and $5 on transport daily? A lot right?
Work Extra Hours
We all know that you cannot save what you don’t have, so consider putting in some extra effort to make more money this year if you want to save more. If you’re salaried, politely ask your boss if you can take additional responsibilities or working extra hours for money. If you’re paid by the hour, consider working additional shifts. If neither of these applies to you, look for freelancing work, or a second job to get more money.
Besides helping you earn more, taking more responsibilities at your place of work can significantly improve your chances of being promoted in the future if you prove to be hardworking and dedicated.
Adopt The Envelope System
This involves writing down your budget for each month, allocating the amount of money to spend on each category on the list and putting the amount in cash in different envelopes. Be sure to include savings as a category on your budget.
Whenever you need to go shopping for something, take only the relevant envelope and spend only from that envelope. Using only cash will help you not to overspend, while the envelopes ensure you have enough money to cater for all your top priorities. With the most important budget items covered, you’re more likely to keep your savings flowing.
At the end of the day, being able to save money depends both on your spending levels and income. With the above tips, you can learn to make little adjustments on both sides of that equation to help you free up more money to save in 2016.