As a young adult in your 20s and early 30s, there are lots of things you’ll need to think about. You might be thinking about buying your first home, starting a family, or saving for retirement. Of course, this is all at the same time as managing student loans, monthly bills, and day-to-day costs. Fortunately, you’re not alone as so many young people are in a similar situation. It can feel like there are so many obstacles when it comes to saving money right now. There are increasing costs of living, student loan repayments, and everyday expenses that need to be covered. But that doesn’t mean it’s impossible to grow your savings now. In this article, we will discuss 5 ways to grow your savings now and give you some tips on how you can achieve it!
1) Consolidate your debt
If you’re in debt, the best way to grow your savings is to get rid of that debt. If you’re paying interest on your student loans, car loans, credit card debt, line of credit, or other types of debt, you’re paying a lot of money out each month. The best way to dig yourself out of a debt hole is to deal with your most pressing debts first, such as any high-interest debt such as credit card debt. Try to pay off as much as you can, so you can start to see your savings grow.
To taking bad debt, the best strategy to tackle it is the debt snowball effect. It implies repaying the smallest of your loans as soon as possible. When that obligation is paid off, you roll the money you were contributing toward it onto the next-smallest loan outstanding. This method should ideally be repeated until all accounts are paid off. As you roll the money from the smallest balance to the next on your list, the amount “snowballs” and grows greater and larger, accelerating the rate at which the debt is decreased.
You might also want to look at refinancing your debt. Refinancing your debt means taking out a new loan to pay off your old debt. Refinancing allows you to get a new, lower interest rate which will save you money and help you grow your savings. If you want to refinance your debt and grow your savings, you should start looking into it now so you can get the ball rolling.
2) Open Multiple Accounts and use a High-Interest Savings Account
A high-interest savings account is a great way to grow your emergency fund savings. To make sure that you have money for rainy days, the FIRE movement emphasizes the importance of having more than 1 bank account. This is to separate between savings, spending, or billing. By separating each individual bank account, you would have better money management skills spending your money.
With rates generally lower than they were in previous years, a high-interest savings account will help you to grow your savings by earning more interest. The best part is that you can usually access your money when you need it. When you open a high-interest savings account, you will almost always have a set time period where you can’t access your funds. This is often referred to as a ‘lock-in period’ and it’s usually between 6 and 12 months. A high-interest savings account will usually come with a higher interest rate than your standard savings account, which will help you grow your savings. You can look for a high-interest savings account at your bank, or you can check out online banks.
3) Start a side hustle
Side hustles are all the rage these days. Side hustles are how many people make money on the side or ‘moonlight’ in order to earn some extra cash. A side hustle is a great way to grow your savings now because it’s easy to set up and manage. It will help to reduce your monthly expenses and help you to make some extra money that you can then put into your savings.
You can look into other side hustles like selling your stuff online, doing paid online surveys, or starting a blog. The great thing about a side hustle is that it’s flexible. You can work on it whenever you have free time and wherever you are. This means that you can do it on your own schedule and at a time that works for you. Because you’re working for yourself, you can also make your hours as long or as short as you want. So do think of a good side hustle that you are willing to commit to!
If you aren’t sure what side hustle to choose. Here is our guide on the top 10 easy side hustles that anyone can start and how to properly start and manage a side hustle to eventually turn it into a business.
4) Invest
Investing is a great way to grow your money, but it takes some time. You can’t just throw money into the stock market and see a return in a week or two. That’s why investing is something that you should start doing now, so you can grow your savings in the long run. There are lots of different ways to invest, including in the stock market, real estate, peer-to-peer lending, or cryptocurrency. The type of investment you choose will depend on your preferences and what you feel comfortable with.
Ultimately, investors need to know that making money through investing is a long-term game, and whatever money is made fast can also be destroyed as quickly. It took our founder, Edmund, 4 years to build up a networth of $100,000 at the age of 24. The game plan to grow his wealth is investing without emotion and letting time in the market grow his wealth.
At some point need to learn about investing to have another source of income to depend on whether it is rental income, dividend, or royalty. If you aren’t sure how to start investing, here is a beginner’s guide on how to start investing in stocks.
5) Lower expenses
Last but not least how to grow your savings now is by lowering your expenses. This will help you to reduce the amount of money that you’re spending each month, which will in turn help you to grow your savings. You can start by looking at your monthly expenses and seeing which ones you can cut down or cancel. You might be paying for unnecessary cable channels or services, paying too much for your cell phone plan, or spending too much on groceries. Do check out our other article on the top 5 best ways to save more money to learn how to save more money.
Bottom line
Your 20s and 30s are a great time to start growing your savings. Now is the time to get a head start on your financial goals so that you can avoid putting them off until later. If you’re in your 20s and 30s and have some extra cash lying around, you should put it towards growing your savings now. There are lots of different ways to grow your savings, whether it be by opening a high-interest savings account, investing, or lowering your monthly expenses. Now is the time to start growing your savings, so you can have money to fall back on when you need it in the future.
