By: Laurel Kubin, Larimer County Extension
Growing a fatter savings account doesn’t need to be a pipe dream. Use these ideas to find money to save and build that savings account faster.
Paying Yourself First is the sure way to pump up your savings. That means depositing a portion of your income into savings at the beginning of the month, then living off the rest. And, automating those deposits makes it even easier; then you don’t have to think about it. It’s done and your savings is pumping upward.
Send your tax refund directly to your savings account. The IRS reports the average American’s tax refund is more than $3,000. Deposit all or part of it into your savings account and watch it grow. The IRS allows direct deposits into one or more accounts, such as a checking and savings account, or into an Individual Retirement Account (IRA). You can also use it to purchase up to $5,000 in Series I Savings Bonds. Be sure to avoid rapid refund loans so that all of your refund is available to you to spend or save.
Pay off high-interest debt. Once you reduce your debts, especially credit card debt, you can start to accumulate wealth. To show you how to pay down your debts faster and save money on interest payments, go to www.powerpay.org This free resource developed by Utah State University Extension gives you comparisons among paying off the highest interest rate debt, shortest term debt, or least balance debt first. You can then make your choice and power pay your way to debt freedom.
Shop for a better interest rate on your savings account. Banks and credit unions occasionally offer a higher interest rate for a period of time. Look for these special offers. Ask about minimum balances and fees. You don’t want fees to offset what you’re earning in interest. You might be able to negotiate a higher rate with your current financial institution if you just ask.