How Often Do You Increase Your Savings Contributions?

Everyone knows you should set aside a portion of your paycheck for savings, whether it goes into a retirement fund or just a separate bank account. How often does that number go up, though?

Money picture from Shutterstock

Finance blog Money Ning suggests that in order to build a healthy amount of savings, the chunk of cash you contribute should go up periodically. As an example, they suggest an increase of $50 every three months or so:

Make it a point to increase your contributions to savings accounts regularly. Boosting your contributions when you get a raise or a promotion is a given — but you should also do it even when you're not seeing a change in income.

Every three months, boost the amount you set aside. You can do this by adding another $50 a month to your contributions, or by upping the percentage of your income you're saving. Decide what you're comfortable with, make it a priority, then stick to your plan.

Is this too much or too little? Does a more frequent yet gradual increase in savings like the 52 week money challenge work better for you? Or do you only revisit your savings budget when you get an increase in income or substantial decrease in bills? Tell us in the comments.

4 Easy-As-Pie Ways to Boost Your Savings [Money Ning]


Comments

    I don't get it! If I could save more per month, without increasing my income or skimping on my necessary expenditures, why wouldn't I do so now? Why not increase my savings by the full amount this month, rather than building up to it?

    If I increased my monthly savings by $50, starting from zero in the first month, after a year I'd have contributed $3300 in total. My bank's interest rate at the moment is 4.62% per annum. Assuming that stayed the same all year, I could earn $55.59 in interest, bringing my total savings for the year to $3355.59.

    Whereas, if I started contributing $600 from month 2 onward, I'd have contributed twice as much: $6600. But I'd earn three times the interest: $154.43, bringing my current total savings for the year to $6754.43.

    The difference is even more impressive if you look at it over a longer period!

    The assumption seems to be that saving is all hard and unpleasant, and spending is all happy funtimes. That's the problem right there. You've got two variables to maximise: contentment and savings. You need to find the sweet spot where you're living below your means and spending more wouldn't make you any happier. Then save your surplus like a mo'fo'.

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