Many people have developed a tendency of saving money every month. Unfortunately, when the expenses exceed the budget, people end up dipping into the savings to cater for their demand. In this case, the savings cannot not grow even if you continuously put some money as saving in your account. You can only say you are saving if your amount is increasing every month. Figure out the reasons why your account is not growing and do the necessary to protect the money that is already in your account.
The following are five ways through which you can protect your savings.
1. Strictly follow your budget
The reason why you made a budget is to have a plan of how to spend your money maybe monthly. If you are able to stick to what you planned, you will not dip into your savings.
If you do not have a budget, you end up borrowing so as to cover some things. If you do not have a budget today, ensure to set one and get control over your spending. A budget will also help you monitor your daily spending.
2. Set up an emergency fund
The unexpected does happen from time to time and you can end up with an expense that you have not planned for like three car repairs in six months. An emergency fund can help you cover these expenses without dipping into your savings for things like your home or your vacation. When you do use your emergency fund, you need to replenish it by adding money back into it over the next few months. This may mean slowing down your savings, but at least you are not pulling money from it.
3. Transfer your savings to another bank
When you are worried about overdrawing your account, it is easy to transfer money from your savings account into your checking account to cover it. While you should have your emergency fund easy to access like that, you may want to move your savings account to another bank where it will take more effort and more time to move the money. This can stop you from making impulse purchases and knowing that you have the money in savings to cover it.
4. Avoid getting more debts with credit card
If you want to protect your savings, you must clear your debts. It does not make any sense to be putting money into savings when you are using your credit card and carrying a balance. You are paying more in interest each month then you would earn in interest on your savings account. Make a plan to get out of debt today and stop carrying your credit cards with you, so you will not be tempted to use them.
5. Spend your money wisely
If you are struggling to get by each month and dipping into savings because of spending, you can protect your savings by sticking to basic spending rules. There are a number of strategies you can employ including switching to cash for your shopping, couponing, and only buying things you need when they are on sale. Additionally, you can work on reducing your monthly bills to free up more money to cover your everyday expenses. The more proactive you are about how you work to save money on what you are spending, the more successful you will be at protecting your savings account.