Increase Your Savings

Increase Your Savings

With these 17 saving tips, you can reach your savings goals in the shortest possible time. Especially in uncertain times, a fixed target can act like a solid rock. Additionally, it helps you envision a happier future, which can significantly improve your overall well-being. So if you’re wondering how to make money fast, here are our 17 best suggestions for increasing your savings.

Before you can start putting money aside each month, you need to grapple with your money flows. This should help you keep track of all of your income and expenses, including any debt repayments, monthly bills, and deposits into your savings account. Let’s break it down step by step.

The most important tip for saving money quickly is learning to manage the budget. When you have your budget under control, you also have control of your finances. This is very important if you want to meet your short and long term savings goals. Here’s how to create a savings plan so you can start saving quickly:

  1. Get an overview of your finances over a period of 30 days. This includes all of your income and expenses.

  2. Compare your monthly income with your monthly expenses to see how much you can currently put on the high edge or how much you go overboard each month.

  3. Divide your expenses into fixed and variable costs. Fixed costs are expenses that are usually difficult to shake, such as rent or ancillary costs. However, you can easily adjust variable costs. This includes spending on groceries, entertainment, and subscriptions.

  4. Identify all of the variable costs that you can use the savings pen to increase the amount that you can set aside each month for your savings goals.

  5. Check your progress regularly and make adjustments if necessary. If that’s overwhelming, there are a number of savings apps and tools available to help you keep your budget on track with ease.

Get out of debt

Before you can start saving, you must pay off any outstanding debts. The longer you are in default with paying off a debt, the greater it will be – due to the growing interest rates over time. Hence, any savings you make will be eaten up by the amount you owe your creditors. Make debt reduction your top priority before tackling any other savings goal.

You can use the 50/30/20 savings rule for this. The 50/30/20 rule was established by US Senator Elizabeth Warren while at Harvard as a professor of bankruptcy law and provides a simple method for reducing debt. And this is how it works:

  • 50% of your income is earmarked for your needs, i.e. for your fixed costs such as rent and ancillary costs.

  • 30% of your income is available for your wishes, ie your variable costs such as restaurant visits and subscriptions.

  • 20% of your income goes into debt repayments first and then into savings. If you earn € 2,500 net a month, you should put € 500 aside. In just one year you will have paid off debts of € 6,000.

Create a savings account

In order to be able to save quickly, you have to separate the money for everyday expenses from the money that you want to put aside. To do this, you should open a savings account. This way you minimize the risk of using your savings to cover your daily expenses. Instead, you are encouraged not to exceed your current budget.

Automate your savings

If you have a fixed monthly income, consider automating your monthly savings. This means that you set up a standing order, as part of which a certain amount is automatically transferred from your current account to your savings account every month. By automating your savings, you will reduce the temptation to nibble on those savings for your daily expenses.

Automate the settlement of your bills

While we’re on the subject: It pays to automate the settlement of your bills as well. Companies often charge dunning fees when customers fail to pay their bills on time. So if you pay your bills before the due date or set up direct debits, you avoid unnecessary costs.

Set a spending limit for card payments

Would you like a great tip to save money quickly? Set a limit for payments made with your credit or debit card. This will keep you from spending too much and will encourage you to think about your daily expenses beforehand. Many banks offer this service. With N26, for example, you can set a daily spending limit and choose whether you want to allow withdrawals from ATMs – all in a matter of seconds, directly from your N26 app. 

Use the envelope method for budget planning

Another great lifehack for saving money quickly is using Dave Ramsey’s budget planning envelopes. You withdraw your entire monthly income in cash at the beginning of each month (yes, all the money!) And distribute it to different envelopes according to your savings goals.

So you have different envelopes for fixed costs such as rent and ancillary costs and envelopes for variable costs such as clothes, dining out and groceries. The downside, of course, is that you have to make cash deposits – these days digital transfers are of course much easier and safer.

Pay less rent

Paying less rent is one of the fastest ways to save a significant amount of money. If you still live alone, you can simply find a roommate. This will cut your rent in half immediately. If you have two roommates, you only pay a third of the rent that you currently have to pay on your own.

So if you are currently paying € 1,300 for a three-room apartment, you will save € 650 per month by having a roommate. If you had two roommates, you would save around € 870 a month – that’s almost € 10,500 a year!

If you already live in a shared apartment, you could move to a smaller room. The amount of the rent is usually based on the size of the room, so you can make significant savings here every month.

Save on your ancillary costs

Another great tip for making money quickly is lowering your utility bills. Your electricity and gas bills make up a large part of your fixed monthly costs. If you can reduce these, you can put a lot of money in your pocket:

  • Change your energy provider. With a cheaper tariff, you can save hundreds of euros every year.

  • Swap out your lightbulbs for LED lights. Not only are they 75–85% more energy-efficient than conventional light bulbs, they also last 15–25 times longer!

  • Invest in a smart thermostat. This will tune your central heating intelligently, which can likely save you a ton of money.

  • Prevent air leaks: Leaks in windows and doors can drive up your electricity bills as your heating has to run at full speed to keep the room warm. Instead, seal these areas with pressure-sensitive sealing strips so that no warm air can escape.

Find a part-time job

“Create, create, build a house” is the motto. A part-time job is a great way to increase your monthly savings. In addition to your normal office job, you could, for example, land a few jobs as a freelancer or look for a job as a virtual assistant or even as a pet sitter.

If you can do that, try transferring your extra income directly to your savings account. Be careful, however, that you don’t overdo yourself and end up with burnout! Your mental health comes first and is more important than your savings goals.

Cancel unused subscriptions

Many companies earn a golden nose with subscriptions. This is due to the fact that canceling a subscription that has already been taken out is simply too time-consuming for many customers – even if they rarely use the subscription.

This is due to the so-called fallacy of sunk costs. Applied to a subscription service, the fallacy of sunk costs means that it will be difficult for you to cancel an infrequently used subscription because you have already paid a lot of money for it. If, on the other hand, you postpone the cancellation of the subscription, it is often due to the hope of using the service again at some point. As a rule, however, very few of us make full use of our subscriptions. It is, therefore, cheaper to cancel all unused subscriptions on the spot than to hope to use the service again at some point.

Try to fix things yourself

A great way to build up reserves is to fix broken things yourself. Thanks to YouTube and the internet, you can find out how to fix pretty much anything yourself online. From leaking pipes to the zipper of your jeans, it’s always cheaper to fix these things yourself than to pay someone else to do it or replace them with new ones.

Think before you spend your money with your hands full

Before making any major expense – be it an impulse decision or not – you should take at least three to four days to think about it. This prevents the impulsive part of your brain from gaining the upper hand through the immediate release of happiness hormones and seducing you into buying.

If you want to put yourself to the test, it is a good idea not to make an expensive purchase for 30 days. This is a surefire way to keep impulse buying at bay. It also gives you enough time to find out whether there might be a better offer elsewhere.

Buy your car at the end of a fiscal quarter

If you’re looking for a real bargain, the best time to buy your car is usually late March, June, September or December. And why? Because most auto dealers are given specific sales targets that they must meet in order to get their financial bonuses. While these sales targets are set weekly and monthly, the big bonuses are paid out quarterly. As a result, you’re more likely to get a better deal on a car at the end of each fiscal quarter because the car dealer will be eager to meet their sales target for the quarter.

Cut back on your grocery spending

If you cut your weekly grocery expenses, you will be amazed at how much money you can save yourself over the course of a few months. One of the best ways to do this is to plan your meals in advance. This allows you to accurately calculate the cost of this before you go to the grocery store, reducing the chances of going over budget.

Another tip: avoid meat once a week. Since meat is usually more expensive than vegetables and plant-based products, it is worth choosing at least one day a week that you do not eat meat. These small weekly savings will add up over time.

In addition, you should reach for products that are on the lower shelves. Supermarkets often place their most expensive products at eye level, which should tempt you to spend more money. The cheaper products are usually at the bottom of the shelf and are often overlooked.

Identify a day of the month when you are not spending any money

To make saving a habit, you can designate a day of the month on which, apart from your fixed costs, you don’t spend any money at all. For example, you could prepare all your meals from the ingredients you already have at home, meet up with friends in the park or at home, or spend a cozy evening with a good book or just relax in front of the TV. Once you get used to it, you can expand the whole thing to two days a month – or even one day a week, in order to maximize your monthly savings as a real saver.

Sell things that you no longer need

If you want to quickly save money for your vacation, it is worthwhile to button up your no longer used possessions and sell them on an online marketplace such as eBay. So you can not only clear out your home but also wash a nice stack of extra money into your holiday budget!