Opening a bank account is a boon as it offers numerous advantages. It inculcates a disciplined habit of saving. You may also earn interest from time-to-time. Banks also offer attractive benefits and features such as locker facility, insurance cover, cash withdrawal facility, Internet facility, and debit/credit card, among others.
There may be times when you face a cash crunch. An easy way to tackle a cash shortage is to tap the money in your savings account. This, however, may lead to financial difficulties in the long run.
Following are four effective ways to avoid dipping into your savings account frequently.
Cut down on unwanted spending
Spending more than you are able to afford is not financially wise. You may have responsibilities such as repaying your car loan installments or home loan installments, which you cannot afford. It is necessary to work towards your financial goals and cut down on unnecessary expenses. You may cut down on frequent outings or revoke your gym membership if you do not use such a facility.
To make this process simpler, you may budget your expenses and income. You may write down your budget and adjust your spending in a manner you seem fit. By doing so, you may effectively cut down on costs and meet your saving goals.
Seek an additional source of income
If you dip into your savings account more than often, it means that your existing source of income is insufficient to meet your lifestyle needs. For this purpose, you may consider finding an additional source of income to supplement your current salary. By increasing your cash flow, you may be able to save a certain part of your salary quite easily.
Set up an emergency fund
Unexpected events may cause a huge strain on your finances. Having an emergency fund allows you to cover unexpected expenses such as hospitalization expenses or unexpected home repairs. Instead of tapping your savings account to meet such expenses, you may consider setting up an emergency fund. By doing so, you may handle your money wisely and in a more systematic manner.
The best way to remain motivated is by rewarding yourself every time you meet a financial milestone. For example, you may purchase your favorite shoes or plan a weekend vacation once you have accumulated the desired corpus amount. You may start with smaller rewards to help you build the momentum. Once you begin to meet greater financial goals, you may give yourself bigger rewards. By doing so, you will constantly look forward to hitting new milestones.
You may keep the aforementioned tips in mind in order to cut down spending from your savings account. This will help you achieve your financial goals quite easily.