Tips to Increase Your Savings in Unsteady Economy

With the economy in the toilet these days everyone is looking for ways to save a buck. While government and business want you out there spending to get the economy back on track, even the most spend happy of us is taking a serious look at their lives and how they can prepare better for the coming Financial Armageddon.

Businesses have been forced to take a long hard look at their balance sheets and decided what they really need and what they can do without. Unfortunately, that kind of analysis often leads to cuts in the form of layoffs and cutting back on purchases, which makes another company look at their balance sheets and take a long hard look at their balance sheet, and so on.

So much like corporate America, you need to treat your life like a business if you are looking to get through the worse economy since the Great Depression. With unemployment rates at multi-decade highs, capping 10% in some areas, you need to get ready for the worse. Like the Boy Scouts, you need to be always be prepared. Expect that it’s going to hit the fan and you’ll need to have some cushion to keep you going until you find a new job or all that money from the deposed Nigerian prince comes through.

In order to have some margin of error in your financial life you need to have adequate savings. Experts suggest having a minimum of three to six month’s expenses in order to keep you going while you are looking for a new job. Of course, the more the better, so let’s look at ways to increase your savings.

Make a Budget

Sit down and compare your expenses to your income and see where money is leaking out of your life like a sieve. Make cuts where necessary and pile the extra money into savings. Without a firm handle on what you’re spending it’s impossible to put money aside. Make a budget, stick to it and cut back on the extras.

Save Your Change

Yeah, it sounds silly, but it works. Set up a place in your house where all of your excess change goes. Save your change throughout the day and empty it into your change jar every night. Don’t touch it, don’t spend it, just wait until it fills up to t a certain point. I had a 5-gallon water bottle and paid for an awesome Vegas vacation when it was about a quarter full. It’s really amazing how quickly it all adds up.

Some banks, like Bank of America, offer checking accounts where when you use your debit card for purchases it rounds the cents up to the next dollar and puts that change into a savings account for you. It’s automatic and it’s awesome.

Get a New Savings Account

Speaking of bank accounts, there are a whole lot of options out there that offer higher than average interest rates. ING, HSBC and many others have made huge pushes to increase their deposit base and are offering great rates to get there. While getting 4% compared to 2% doesn’t seem like a lot, over time it adds up.

Go Automatic

Have money direct deposited into your savings. This way you don’t see it and don’t even think about spending it.

While there is a whole host of savings tips out there, these are simple and I have personally done all of them. They work! Now if I can just keep out of the unemployment line I won’t have to use any of them.