Doubling your savings may not be as hard as it sounds. There are a handful of simple habits you can start today that could make all the difference with your money. But don't take our word for it. As Alinear quoted from CNBC Make It, there are five tried-and-true strategies from super-savers that don't require much time or effort. If it worked for them, it could work for you.
1. Automate Everything
Automating your financial life, such as sending your money directly from your checking account or paycheck to investment accounts, savings accounts and creditors, is a popular strategy used by super-savers. It stops you from sabotaging your own progress.
If you run out of willpower and you blow all the money that you meant to save on things that you didn't really need, then you're never going to get anywhere. However, if you automatically set aside money in an account or for bigger savings goals like a home or car, you will never be tempted to skimp on savings.
2. Monitor Your Progress
Grant Sabatier confess that he went from having $2.26 in his bank account to $1 million in five years. He says a crucial step he took was monitoring his net worth. He look at his net worth every day when he wake up in the morning while sipping a cup of his favorite coffee. There are few greater motivations than seeing this number rise over time. No matter where you start from.
3. Track Your Expenses
If you want to save big, you have to know where your cash is going in the first place. Many people started their journey to financial independence by analyzing their spending habits and figuring out where they could cut back. By knowing how you spend, it lets you determine whether you get value for your money, and where you might be able to focus efforts to reduce expenses further.
4. Start with One Small Shift
For Chris Reining, one of early retirees who built a $1 million portfolio by age 35, the key to saving half your income is to start small. Many people out there have no worry about the $5 latte, but the more you think about it, cutting out the $5 latte is a good place to start. After foregoing his morning coffee, Reining eliminated the $15 lunches he bought every day. Next, he cut out the bigger things, such as the $1,000 a month he spent flying airplanes. The small changes will lead you to be able to make the big changes.
5. Invest
Just saving money doesn't get you rich. If you're looking to create substantial wealth or double your savings, make your money work for you by investing it. Keeping your savings in your bank account, which is definitely better than nothing, put that money in the market.
Over the long run, that compound interest is going to add up and makes a sum grow at a faster rate than simple interest, because in addition to earning returns on the money you invest, you also earn returns on those returns. It causes your wealth to ‘snowball’ over time and means that you don't have to save as much to reach your financial goals.