The new year is always a good time to make resolutions. Some common ones include losing weight, getting healthier, saving more money, and becoming more organized. This year we want you to add one specific financial resolution to your list: Start saving money. Here are 10 New Year's Resolutions for saving money that everyone should try this year, along with tips to help you keep them.
1. Pay Yourself First
This may seem like an odd first resolution for our list of goals to save money, but paying yourself first can actually be the most powerful tool in terms of building up a nest egg or emergency fund. By "paying" yourself first, we don't mean actually writing checks or transferring funds from your checking account into an investment account. The way to make this work is by simply transferring money (from your checking account) into a savings or investment account before you do anything else with it. This will become automatic over time and can't be overdrawn, so you won't even notice it's gone.
2. Set Up an Automated Savings Plan
Another great tool to save more money is by setting up a plan where any time you get paid, some of it is automatically transferred into an investment or savings account on a predetermined schedule without you having to think about it. You can use this same technique with not as automated investments, such as 401(k)'s and IRAs. For example, if there are three months left in the year, you could commit to depositing $300 to your 401(k) account every month.
When it comes time for tax season, that money can also be automatically transferred into your checking account and then used in any way (this is helpful if you want a little wiggle room or don't have a specific goal yet). Remember, the key is simply getting the money out of your hands, so you aren't tempted to spend it on something else.
3. Apply coupons
Coupons are a good way to save money on groceries, and they help stretch your grocery budget further, which means you'll spend less at the store and more time doing other things you enjoy. It is estimated that people who use coupons regularly can save anywhere from 10%-70% on their grocery bills. Even if you don't want to be extreme about it, even saving 5% on your groceries would add up fast in just three months' time. There are different Walmart promo codes that you can apply before buying your product.
4. Ditch Your Credit Cards
The biggest barrier to saving money today is credit card debt. People end up with high-interest rates on credit cards because they never pay them off completely or use the cards too much. Ultimately, though, the best way to save money is by cutting back on how much you purchase using your credit cards (and, when possible, use cash instead). If you do this, start by paying down your highest interest rate cards first and building up good credit by paying off charges in full every month. This will be an excellent boost to your credit score while also saving you a lot of money over time.
5. Find Your Savings Rhythms
When you think about it, some people are basically "savers," and others are "spenders." Most likely, you have both sides inside of yourself as well, which means that if saving money feels difficult or uncomfortable for you, it could just be because your unconscious habits haven't caught up with your goals yet. Try finding small ways to save here and there, like bringing your coffee from home instead of going to Starbucks every day. Once you've done this a few times, it will get easier – and if you practice for long enough, saving money may even feel automatic or natural.
6. Pay Down Your Student Loans ASAP
Student loans are often the worst kind of debt in terms of how much interest builds up over time. If you have any student loans left – no matter how young or old you are – start paying them off right now, especially if they carry high-interest rates. Whether that means putting extra money towards your loan payments throughout the year or making additional payments when you can, be sure to put all of your focus on getting rid of these pesky debts as soon as possible.
7. Budget with Monthly Goals
When it comes to monthly spending goals, there are two main ways you can approach your budget: either set up a rough estimate of how much money you will need each month or put together a detailed list of everything you plan on buying and then figure out how much your budget allows for each item. The first method is easier but likely less accurate; the second is more time-consuming but ensures that nothing falls through the cracks (and also provides an excellent way of tracking where all your money goes). Whichever one you choose, make sure you do it every month! Likewise, if something isn't working – like if it turns out that two lattes from Starbucks every week were the only things getting cut from your budget – you can easily change things up and see what else works.
8. Bail Out Your Emergency Fund Whenever You Need It
If something goes wrong in life, it's important to have an emergency fund on hand to help get you through. In fact, having three months' worth of living expenses kept in a separate account means that if the worst-case scenario happens (i.e., losing your job), you'll still be able to keep yourself afloat until you start earning money again. This is why using your emergency fund when unexpected car repairs come up is so important – even if it means bailing out some other debt or taking a couple of hundred dollars away from another savings goal temporarily.
9. Set a Weekly Fun Budget
Even if you have other financial goals that keep your mind busy, it's easy to get caught up in needing new things or wanting to buy experiences. This is especially true for younger people who might not yet have any kids, but even adults with families are vulnerable when there aren't enough responsibilities weighing them down. Even though fun and entertainment should always be a part of life (no matter whether you're having the best time ever or going through an unhappy period), it's still important to set limits for how much money you spend on "fun stuff" each week. Put all of this spending together at the beginning of the week, and then see what amount comes out as your total – then stick to!
10. Create a 'Pay It Forward' Fund
If you have hard times, sometimes the best way to get back on your feet is by helping other people. By putting some money away each month and then giving that money away to others who need it when you can afford it – often with zero strings attached – you'll feel better about yourself and also help others at the same time. This is one of my favorite savings tips because not only does it help keep old habits alive (like being generous), but it can also teach new financial patterns if you're able to stick with this strategy for longer than a few months.
Conclusion
Practice Makes Perfect You can tell by now that changing long-term habits is a huge undertaking. No matter how much you love your new habits, there will be times when you get bored or feel like a failure. If this happens over and over again, the best thing to do is take some time off (maybe even just for a couple of days) and then try again afterward. Don't compare yourself to other people, either – having the right mentality in life is more important than anything else!
