5 ways to improve your everyday finances

Fiskes/Getty Images/iStockphoto

If you really want to improve your finances, doing the basics alone won’t cut it. To spend smarter, save more, and earn more, you need to take additional steps. Thankfully, getting started is the biggest hurdle. Once you start improving your finances, good daily financial habits will come naturally.

October 12th is National Savings Day, and it’s the perfect time to increase your financial literacy. Capital One created National Savings Day to highlight the importance of increasing savings and help people feel confident about their finances.

Saving money often feels difficult to keep within your budget. This requires developing good savings habits, monitoring your overall spending, and leveraging the right tools to help you reach your goals.

Capital One’s Money & Life program is an online resource that offers a wide range of useful tools. Self-guided exercises, one-on-one mentoring sessions, and on-demand workshops are free to everyone and you don’t need to make a deposit to Capital One to take advantage of them.

If you’re ready to reach your financial goals, here are five savings strategies to help you reach your financial goals.

Automate savings from your paycheck

If you have to make a conscious choice to save money, it’s much more likely that you won’t. By setting up automatic transfers from your paycheck to your savings account, you can avoid forgetfulness and reluctance once and for all. So you have to put more effort into not saving than saving.

To further improve your financial situation, try increasing the amount of money automatically transferred to you every few months. As you slowly adjust to tighter constraints, you may find that you save more than you thought.

Find small ways to save money every day…

There are many ways you can reduce your spending. For example, buying second-hand goods, using coupons, and taking public transportation instead of expensive ones. Plan your next week’s meals based on what’s currently on sale and see how much you can save on groceries. If you can save $10 per day, you’ll save about $3,600 a year.

…and put that money to work

Saving a little bit every day is a great first step, but don’t leave your money alone. Make the most of your small daily savings by placing them in an income-producing account. Earning interest with a high-yield savings account or similar savings product can help protect your hard-earned savings from being wiped out by inflation.

Increase your savings with CDs

Certificates of deposit (CDs) offer safety, predictability, and higher returns than regular savings accounts, making certificates of deposit (CDs) an effective tool for promoting savings. CD accounts can be opened at many banks and credit unions.

With a CD, you deposit a certain amount of money for a certain period of time and earn a certain amount of interest over that period. At the end of the period, you can withdraw your deposit plus interest. You can also roll your balance over to a new CD for the new semester. Note that there are usually penalties if you need to withdraw your money earlier than the maturity date.

CDs come with a variety of perks that can appeal to thrifters. Here are a few:

Predictability: While the interest rate on a high-yield savings account can fluctuate over time, a CD guarantees the same fixed interest rate throughout its term. Some savers prefer CDs because they know how much money they will make when they withdraw their funds.

Higher profit: The annual percentage yield (APY) varies from CD to CD and depends on the length of the term, but they typically pay much higher returns than regular savings or checking accounts. Currently, you can find CDs with APYs around 4% to 5%. For example, Capital One’s 18-month 360 CD account pays 5.25% APY as of September 7, 2023. Let’s say he deposits $5,000 into that account today. If you withdraw within 18 months, you’ll have earned $399.

Low risk investments: CDs are insured by the FDIC when deposited with an FDIC-insured institution, so you don’t have to worry about losing your money. Plus, with a fixed interest rate, you don’t have to be at the mercy of the ups and downs of the stock market when trying to grow your money.

You can encourage responsible savings. One thing to keep in mind about CDs is that you’re essentially locking up your money for a period of time. If you need access, you may have to pay a penalty to withdraw early. However, optimistic savers may argue that this will prevent unnecessary spending.

Check your financial accounts daily

If you don’t know everything about money, you won’t be able to make any real money. You have to be your own expert. So, set aside a few minutes each day to check your checking account and credit cards. If you make this a daily habit, you’ll be able to spot and correct fraud quickly. You’ll also have a better idea of ​​how much you spend each day, making it easier to notice areas where you can cut back.

You might be surprised at how much these simple steps can improve your finances.

GOBankingRates Details