How to Build Your Savings Account

To build savings look at ways to both reduce expenses and increase income.

Saving Money
Getty/JGI/Jamie Grill

Building savings is an important financial goal for many people today. So often when we think about saving money, though, the first thing that comes to mind is cutting back on expenses. And while that is important, if that is all you focus on, you will miss half the opportunities for build your nest egg.

The key to building savings is twofold: reduce expenses and increase income.

Increase Income

Let's start with the income side of the equation, though pairing reduced expenses with increased income will grow your nest egg much faster.

Try these ways to increase your income include:

  • Get a raise at your current job. While this is not necessarily easy, learn more about how to negotiate a salary increase.
  • Find a new job that pays more. Again not easy but starting a job search can also help you negotiate that raise if you like the job you have.
  • Get a second job, either inside or outside the home. You can make extra money moonlighting in a work at home job, and being at home makes holding a second job much more manageable.
  • Start a work at home business. How much time and effort you put into this can really vary, as does the pay.
  • Pick up extra cash doing microjobs. Squirrel away all the extra bit of money you earn at these tasks.

More Details: How to Increase Your Income by Working from Home

Reduce Expenses

Creating a budget and sticking to it is a first step in reducing expenses. But a budget is just numbers on paper. Actually reducing expense is done in our everyday lives.

And it's not easy, but here are some ideas for reducing expenses:

  • Review monthly expenses and see what can be eliminated or reduced. Don't be afraid to negotiate with companies you deal with. You'd be surprised at what you can save. Here are 10 ways to cut your monthly expenses.
  • Shop around; find deals on everyday items. You may have to spend some time to save some money, but if you are serious about building a nest egg, it is worth it.
  • Working from home saves money on everything from child care to clothes.
  • Reduce your debt or better yet avoid debt in the first place.

More Details: How to Reduce Expenses

Build Your Savings

And as you make you the effort to reduce expenses and increase income, you must, of course, actually save the money these efforts yield. Build savings by having a certain amount automatically deposited into a savings or investment account. If you pay off a debt or are able to decrease your spending on an item already in your budget, have the money in the budgeted deposited into savings regularly.

And be careful not to break into that savings for just any old thing. Determine in advance what you are saving for, so that you know when it's the right time to spend it.

If your strategy for building savings involves making extra money, try depositing your earnings from all or some your work at home endeavors into a savings account. if this is new income for you, then you won't miss it, and you will see your nest egg grow.