How to Grow Your Money Fast
Well all know money doesn’t grow on trees. But it can grow. It just takes some good old-fashioned saving. Here are three ways to add make your money tree grow faster.
1. Set up an automatic withdrawal. This is a relatively painless way to build a nest egg. Most banks will set up a recurring transfer from your primary checking account into a savings account; some online banking programs let you set this up and manage it yourself. Also check with your employer: if you have your paycheck deposited directly into your bank account, sometimes the payroll department will split your deposit between two accounts.
Setting up an automatic withdrawl is not just convenient, it’s also a smart way to pay yourself first. Because you don’t have to make the decision each month to transfer cash to your savings account, you won’t be tempted to fudge on your savings plan.
2. Make your dollars work harder. If you socked away cash into a traditional savings account each month, you could be losing out on earning interest. Traditional savings accounts typically earn a half a percent or less in interest. A high-yield savings account or certificate of deposit (CD) on the other hand, can earn between five and six percent.
A CD is a “time deposit”, a deposit with a fixed length of time. Typically there are early withdrawal fees, but this can be a good option if you know you are not going to need the money before the term expires.
High-yield savings accounts work just like regular savings accounts: typically, you can access the money any time you want.
Let’s say you started with $500 and planned to save $100 a month. In a traditional savings account with a 0.5 percent interest, your $900 would have earned a whopping $15.15 in interest after four months. Put that same savings plan into a high-yield savings account with an interest rate of 5.25 percent, and your $900 would have earned $168.89.
3. Start now. The sooner you start, the faster your money can begin to grow. Even if you can only put away a little each month, start now and you’ll be amazed at how you can grow your money.