Most people think saving money is painful.
Although you know why you should allot a portion of your income to current
account or savings account deposits, it’s always a struggle not to spend your
disposable income. There are many ways and methods you can employ to make the
process easier for you, from keeping a spending diary and making a very strict
weekly budget to getting a savings account with required monthly deposits.
These methods can help a lot.
Yet for some people, it has to be more
direct. A spending diary can help you keep track of your spending, but that’s
basically it. A budget gives you an idea on how much you should spend, but it
doesn’t stop you from spending. Luckily, there are certain ways that can help
you save money in a more proactive way.
The piggy bank method of saving
As a kid, you may have had a piggy
bank. Owning a piggy bank, or a coin
jar, is still an effective way to save money, even if you’re already an adult.
Make it a habit to put your extra coins on the jar every day. Every now and
then, put some bills too. How much you put everyday is entirely up to you. You
can set a specific amount every day or you can just go with how much coins you
have for that given day. However, make sure it’s a jar or container you
couldn’t open easily so you wouldn’t be tempted to check your savings. Open the
jar only when it’s full and deposit it into your savings account or current
account, or whatever bank account you have that offers the most competitive
The current account-savings account connection
If you have savings accounts and account
accounts from the same bank, consider linking them up and avail of a standing
Set the standing order so a part of your
deposits for the current account goes immediately into your savings account.
For instance, your salary goes into your current account. Set an order so your
bank will transfer 100 dollars from your current account to your savings
account every month. You wouldn’t even see the money since it’ll go directly to
This helps since you won’t see the money on
your current account, and you won’t feel tempted to spend it. You can do this
technique if you want to set aside a specific amount of money every month for
your savings account deposits, especially if you can’t trust yourself to do the
A similar method that can be employed on
your current accounts and savings accounts, it is called sweeping. You set your
current account to transfer money to your savings account at a specified date.
This way, whatever money remaining on your current account will become your
savings deposit. This only works if you
do not have to keep a specific amount of money on your current account. The
rationale for “sweeping” is that you don’t have a current account to accumulate
money for savings and interests anyway. So you have it for convenient access to
your money. This works because it allows you to have deposits on your savings
You have to take note of the specifications
of this sweep. Make sure the bank does not “sweep” funds into your savings
account when you do not have any funds on your current account, which is
possible because of overdrafts. Normally, banks do not sweep in this kind of
situation, but you have to make sure nonetheless.
This raises the question: is it wise to
transact all your financial needs in one bank? As long as you’re not on the
red, it is.
Consider opening special bank accounts that
offer high interest rates. A fixed deposit bank account or a time deposit bank
account, as it is called elsewhere, offers rates way above the bank standards,
although it limits to your access to your funds. If your intention is to save
as much money as possible, a fixed deposit account is perhaps the most viable
option for you. You wouldn’t be able to withdraw your money until after a
specific maturity date, which usually lasts for a couple of years.
A foreign currency savings account might
also be a good idea, although this involves certain risks. Foreign exchange
movement is unpredictable, so you can stand to lose money in an American dollar
bank account, although you can also earn money from it as well.
Take advantage of bank accounts that offer
incentives for saving. This kind of bank account may be difficult to find in
Singapore but they do exist. For instance, some banks give you monetary or
non-monetary rewards for depositing a specific amount of money into your
current account. Others provide discounts and bonus “sweeps” when you use debit
cards, which is connected to the current account.
Find banks that provide you with additional
value for the service you are getting. If you’re getting a discount on your
bank fees for depositing a specific amount of money into your current or
savings account, that means you’re getting more than your money’s worth.
Assessing your accounts
Another way of building up your savings is
by assessing the specifications of your bank accounts. This method isn’t
exactly easy, but it is necessary.
Check how much money you’re making from
your bank account and how much you’re paying to keep the account. You can also
compare interest rates from other banks. The point of doing this is to figure
out if your money is working as hard as it should, and if you can explore other
options for saving.