When people talk about saving money, they usually mean cutting non-essential expenses from their overburdened budgets and saying goodbye to fun. And while it’s true, limiting your spending can save you money, but it’s not the only way you can improve your financial standing. Thinking about the accounts you use is another great way to maximize savings.
Your Line of Credit
Like many people, you might have a line of credit and several credit cards under your name. These accounts help you tackle expensive, unexpected expenses when your savings fall short. As long as there’s room on your account, you may get help for a financial emergency.
During the emergency, your urgent expense takes precedence. But what about after the dust settles? Do you have any idea on how you’ll pay back what you owe?
Plenty of people plan on paying the minimum. It makes sense. After all, it’s the least you have to pay to avoid late fines. However, this small payment does nothing to wipe out debt. In fact, it keeps you in debt longer as you’ll accrue interest and finance charges on your outstanding balance.
Boosting your minimum monthly payments has the potential to reduce what you pay in interest—not to mention you’ll free up this account so that it’s available in another emergency.
Your Bank Account
Where do you keep your savings? If you’re like most people, you squirrel away your cash in a basic account provided by your main bank. While this setup is better than the alternative—no savings account at all—it could be costing you more than you think.
For one thing, the biggest banks charge costly fees for routine upkeep. The average Canadian may have to shell out $3.95–$14.95 per month — that’s as much as $179 each year! You also have to watch for pesky fines, such as overdraft charges, insurance, and ATM fees.
All told, you could be paying a lot to keep your money in a big bank. You stand to save more simply by switching to a no-fee digital bank that offers free checking and savings accounts with the same FDIC- or CDIC-insured security as other products.
These neobanks, as they’re also called, often offer better savings rates than the biggest banks, too. This means your deposits will earn more each month with a simple switch to a different account. You won’t even have to boost your contributions to see this change.
Most people don’t want to live without insurance. It provides a bigger safety net than a line of credit that you can rely on for life’s most complicated disasters. You’ll have peace of mind knowing that you’re covered for expensive accidents, natural disasters, and even theft.
Most people also can’t live without insurance, as it’s a legal obligation if you plan to own a car or home in many places around the world.
While you can’t cut insurance premiums and deductibles from your budget, you can reduce what you pay by shopping around. Smaller insurance companies often provide the exact same coverage as the national brands at a fraction of the cost.
Before you jump ship, make sure you review your policies carefully to ensure you’re getting the coverage you need.
Saving money doesn’t always have to involve saying “no” to the fun things in life. You can find extra cash by changing the way you use your line of credit, bank accounts, and insurance.
is a seasoned business writer and expert, specializing in delivering concise and insightful articles. With over a decade of experience in the corporate world, She brings a unique perspective to work, offering practical advice and actionable strategies to help entrepreneurs, executives, and professionals navigate the complexities of the business landscape. Her writing combines a deep understanding of industry trends with a passion for empowering readers to achieve success in their ventures.