8 Foolproof Ways to Grow Your Savings

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1. Direct Deposit Into Your Savings

This is my personal favorite! Think of yourself as a regular monthly bill you have to pay. All you have to do is arrange to have a set amount of money directly deposited from your paycheck into a savings account each month.

I recommend using a separate savings account because if you have access to your funds in your checking account, you’re more likely to spend them. Again, it might hurt a bit at first to take home a little less every month, but trust me, after a while you won’t even notice it’s gone. Here’s a moment when the “set it and forget it” strategy works wonders.

2. Never Spend a Bonus Again

It feels great to be rewarded for your hard work. And it feels even better to spend that hard-earned bonus on something you’ll enjoy, like a trip to France or an iPad. At the same time, the pleasure of a vacation or new gadget is short-lived compared to financial security. So make a pact with yourself to put every bonus you get from here on out to good use. If you direct 90% of your bonuses straight into your savings account as a rule, you’ll still have 10% to treat yourself with (plus the comfort of knowing that you’re building a well-earned safety net). I live by this rule.

If you get a cash-back reward for any spending on your credit card, just make it a rule that those dollars will be dedicated to your freedom fund.

3. Go Nuts Cutting Your Unnecessary Costs

O.K., O.K., this seems like an obvious one—and easier said than done. Actually, most people spend money on more unnecessary items than they think. So take time to look at where your money is going in detail and begin to cut back. Saving $10 here and there could help you put a lot away in the long run.

RELATED: The $1,000 Challenge: How I Cut My Family’s Budget

4. Open a Seasonal Savings Account

Many banks offer seasonal accounts meant to save for holidays like Christmas. These accounts give you reduced access to your accounts, charging a hefty penalty each time you withdraw more than permitted. Since emergencies don’t occur often, a seasonal account could make sure you’re touching it only when needed (just make sure you’re not tempted to blow it all on Christmas gifts).

5. Sell Unused Items

I love this one. Chalk it up to my massive craving for organization, but I’m all about getting rid of things I no longer use. Rather than throwing these unused goods away, start selling them, and put that money into your emergency fund. All you need to do is post them to a site like eBay or Craigslist or Amazon and you can get rid of items from the comfort of your home. You can also take your clothes to a consignment shop to have them sold for you.

6. Stop Spending $5 Bills

Instead of saving your pennies, put aside any $5 bills that come your way. Never spend a $5 bill again, and you’ll be surprised by how quickly this silly trick will help you come up with a few hundred dollars to add to an emergency fund.

7. Earn Extra Income

You could pick up odd jobs via websites like TaskRabbit.com, DoMyStuff.com, Elance.com, FreelanceSwitch.com or Sitters.com.

RELATED: The Surprising Way I Make Money on the Side

8. Use “Cash Back” Rewards

If you get a cash-back reward for any spending on your credit card, just make it a rule that those dollars will be dedicated to your freedom fund. It may only add up to $100 extra each year, depending on your spending, but every little bit counts.

Reprinted from the book “Financially Fearless: The LearnVest Program for Taking Control of Your Money” by Alexa von Tobel, CFP®. Copyright 2013 by Alexa von Tobel. Published by Crown Business, an imprint of the Crown Publishing Group, a division of Random House LLC, a Penguin Random House Company.

  • jalva68

    Love the article. Now … once I have the 6-12 months put away … what is the best way to make that money grow beyond what a regulalr savings account can offer?

  • sadsack64

    I would buy 12 one year CD’s. Open one CD each month in the amount of one month expense. Then you are never more than 30 days away from being able to get cash. The return will be a little better than a regular savings account. You can set the CD to auto-renew.

    • Joshua Miller

      Or get laddered cd’s like ncsecu(my bank I use) offers…yea you have to start it with the 250 added up for each level but probably worth it in the long run (gives around 1-1.01% if I recall)