Out with the Old, In with the New: Modern Savings Tips

You may be one of many people who remember grandparents going to secret stashes throughout their homes whenever they needed money for something. They probably cited reasons such as not trusting banks or not understanding how you can put money in an account and see it decrease rather than grow. While saving money in your home may seem like a good idea that worked back then, that’s not the best way to save money these days. Consider these money savings tips.

Money at home cannot accrue interest

If you keep your money at home, it can’t gain any interest. The amount you have will remain just as it is, except every time you take some out, the amount you had will decrease. If you place your money in an interest bearing account at a financial institution instead, you will not only have access to your funds, but you will see the interest build and increase your money.

Saving for families

Of the various money saving tips for families, taking advantage of tax deferred savings vehicles is perhaps the most important one. If you want to save for college for your children, using a 529 plan to do so will offer you tax breaks. With a 529 savings plan, your money is invested in similar ways to IRAs, such as in mutual funds and other investment vehicles. Your money can increase without you paying taxes on the investments. Qualified distributions from the plan are also tax free.

Saving for your retirement can also help you save money with tax deferred contributions to your 401K account through your employer. You will be able to save for your retirement years with funds from your paycheck that have not been taxed. Taking time to plan for retirement now will help you save money on your expenses once you stop working.

Create a household budget

Creating a budget is one idea that never goes out of fashion. It can be difficult to save money if you aren’t really aware of how much you’re spending. Track your household spending so you can identify areas where you can cut back or possibly eliminate completely. Your budget should allow for regular deposits into an interest bearing account and treat the expenditure as a necessary expense.

A budget doesn’t have to be complicated, nor does it have to eliminate all entertainment and fun for your household. The most successful budgets replace high cost expenses with lower costing ones that still allow for simple luxuries.

Review your credit report

Using your credit report to save money is a well-kept secret that’s easy to implement. According to the Federal Trade Commission, approximately 25% of consumer credit reports have errors on them that can cost the consumer money. One way you can review your credit report and save money is by identifying these errors. When you spot something incorrectly reported on your credit report and you request that it be corrected, your credit score rating can increase. Once your score goes up, you are able to save money on the interest rates creditors will offer you when you apply for a loan with them.

If you are unaware of any legitimate errors on your credit report, you could possibly end up paying debt that doesn’t belong to you. And if an identity thief racks up debt in your name, you may end up paying for that debt if you don’t know about it. Also, considering that many insurance companies and employers now check your credit report before offering you an insurance policy or a job, a good credit score can help you save money on policies and you can also get a better paying job.

Saving money is a necessary goal in these current times, one you can’t afford not to work towards. Most households understand the need to put away money for a rainy day, but may not know of the best ways to make savings plans and put them into action. By following these money savings tips for the modern consumer, you can be well on your way to building a healthy stash that will grow instead of one lying stagnant under your bed.

Joy Mali is an active blogger who is fond of writing articles on Finance and advising people to monitor their credit history to ensure a clean and error free report. Follow her on Twitter to know more on smarter saving tips.