The 3 Best Money Exercises to Fatten Your Bank Account

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We are so financially out of shape these days, they pull a muscle just thinking about saving money. Two in three of individuals don’t have enough money in savings to afford a $500 financial emergency. Nearly one-third of households making $75,000 or more a year occasionally live paycheck-to-paycheck. Some workers believe they’ll work until they drop dead or become too sick. It’s an epidemic.
Much like working out, a variety of excuses keep millions of people from saving money. Perhaps you think you’re too busy to budget, too young to worry about the future, or too broke to save anything. But, in the end, nobody cares about your finances as much as you. Let’s take a look at the three best money exercises
to help build your bank account.

1. Automatically pay yourself first

Paying yourself first is a golden rule in personal finance. The concept is simple: Everyone is collecting money from your paycheck, why shouldn’t you be the first person in line? Instead of trying to save what money is left over at the end of the month, which always seems to be less than predicted, place money aside before spending money on anything else. This doesn’t mean you should stop paying monthly bills in order to save, but rather adjust your spending habits so you find a healthy balance between savings, necessities, and wants.
After paying everyone else first for so many years, it can be difficult to break the bad habit. Make your savings automatic so you don’t face temptations. Having your contributions pulled directly from your paycheck or bank account significantly improves your chances of building up your bank account. A report from HSBC finds regular savers accumulated an average of $168,099 in retirement savings and investments, compared to only $86,529 by those who only saved from time to time.

2. Track your spending

Your bank account is never too strong to carry your lunch to work. Using the proverbial brown bag can be cost effective and healthier than eating out. The problem is we tend to ignore our financial health in favor of convenience. Before you know it, you’re spending thousands of extra dollars a year on thoughtless spending. A recent survey from Visa finds Americans spend about $20 per week for lunch meals out. That may not sound significant, but eating out for lunch totals $1,043 per year. Americans also spend almost double on lunch meals out compared to self-prepared lunches.
Make a point to track your spending for at least one month. You’ll likely find you’re spending more money than you realized on at least one area in your life. Ask yourself if the price is worth the value you’re receiving and if it’s worth not saving that money for your future self — the person who may face a financial emergency or want to retire. After tracking your expenses for one month, try tracking them for an entire year to capture more financial transactions. Even semi-annual expenses can be reduced if you pay close enough attention. For example, increasing your auto insurance deductible from $500 to $1,000 cuts premiums by an average of 8.5%.

3. Make your own rules

Life is full of rules. We’re taught rules during childhood and never really grow out of them. When we’re adults, we’re told rules like how much we should spend on cars and homes, why using credit cards is never a good idea, and when to retire. Truth be told, not only does nobody care about your finances like you do, nobody knows them as well as you either. Your life has variables that general advice doesn’t address.
Recognize the insight general advice can give you, but apply it to your own financial situation and goals. You don’t always have to spend 30% of your income on housing, or take out a car loan for several years, or avoid credit cards like the plague. In fact, if you’re extremely responsible, you can make credit cards work for you thanks to cash back and other perks. If you want to retire early, you’ll find that general advice like spending a third of your income on housing can severely hinder your goal. Personal finance is aptly named. Treat it that way.