Best Saving Strategies for The New Year
Successfully reaching savings goals involves both short term and long term strategies. Everyone is different when it comes to spending and saving priorities and habits. Focusing on strengths helps you create a plan that will work for long term success.
Savings accounts can be used as an emergency fund, for annual goals like vacations and holiday spending, or to pay for intermittent bills like a quarterly insurance payment or annual taxes. Establishing a savings account can prevent or reduce debt accumulation when unexpected or intermittent bills come due. The challenge is often not in the lack of understanding the value of having a savings account, but in the implementation and finding “extra” money to fund a savings account adequately.
Short term saving strategies have the ability to jump start savings goals and increase balances quickly to gain momentum. Ongoing long term daily habits will help change spending patterns, which lead to regular deposits into your savings account. Setting a specific goal that can be tracked and measured will allow you to recognize success as balances grow.
Once you have money earmarked in your budget for savings, immediately put it into a separate account that is not readily accessible. Online accounts and separate banks are a common strategy to separate money and make it harder to get to, while still giving you access when needed. This step reduces the temptation to spend the money on impulse purchases.
Jump Start Savings
Sell unused items. Selling unused items will reduce clutter, give you a sense of moving forward, and put money in your savings account, all at the same time. Go through your closet or garage and sell anything of value that you are not using. Clothes, tools, work out equipment, and small kitchen appliances are among common items that seemed like a good idea at the time, but may be collecting dust. For a more thorough cleaning go through every item in a room and ask yourself if you need it and if it matters if you get rid of it.
Quit or reduce expensive habits. Some habits are so routine you don’t even think about them. Whether it is smoking or a $5 daily Latte, habits that drain your wallet can be bad for both your financial and physical health. Regular gambling or lottery ticket purchases can siphon money from higher priority items to feed an addiction. They can be both expensive and difficult to change but will bring significant savings when eliminated.
Negotiate rates and fees. Look over each bill and statement for one month looking line by line for fees and charges that have little or no value. Can you get cell phone insurance elsewhere for less? Could you raise your deductible on your auto or home insurance to reduce costs? Call credit card companies and request a rate decrease. Eliminate cable channels you don’t watch or downgrade to a plan with fewer channels. Late payments and overdrafts can be prevented through automating your financial payments and deposits.
Evaluate transportation options. Is it necessary to drive to work each day? Own two or more vehicles? Could you walk or bike to work or when running errands? Is a bus or train available that might eliminate a vehicle? Is carpooling an option? Could you work from home a few days a week saving gas and vehicle wear and tear?
Cancel unused memberships and subscriptions. Many companies want to set you up on monthly plans. If you are not using the service, cancel. If magazines or newspapers are piling up because you don’t have time to read them, cancel the subscription. Even if the account is prepaid for the year, many services will prorate the fees at cancellation saving you money each month. When cancelling ongoing memberships and subscriptions weigh cancellation fees, which could negate savings. Sometimes accounts require 30 or 60-day notification for cancellation. If you choose to change service providers request the new service pay any cancellation fees and/or waive start up charges.
Loan consolidation or refinance. Combining debt into a single lower interest rate and lower monthly payment can provide additional funds each month for savings. Consolidating credit card debt and student loans is a popular place to look for savings. Refinancing a home or vehicle may also provide lower rates, lower monthly payments, and more room in the budget for building your savings.
Ongoing Daily Habits That Save You Money
Save money when shopping:
- Shop with a list and only buy what’s on the list.
- Don’t wander the aisles, but head directly to items on your list.
- Use coupons when possible for things that are on sale and that you need.
- Wait 24 hours or more for unplanned purchases to reduce impulse buying.
- Avoid the mall or other spending triggers.
- Do not save credit card information with on line accounts.
- Use an app and the internet to compare prices and look for discounts and coupons.
- Sign up for rewards programs at stores and restaurants you frequent.
Save money on food
- Have pot luck dinners at home instead of eating out with friends.
- Plan your menu around what’s on sale.
- Eat a meatless meal at least once a week.
- Drink more water, especially at restaurants. Filtered water is less expensive than bottled water.
- Buy in bulk.
- Cook at home. Premade casseroles and a crock pot can provide delicious meals at a fraction of the cost of eating out.
Save money on entertainment
- Find free and inexpensive activities around town.
- Learn what days’ museums are open for free or at a discount.
- Check discount sites like Groupon or Living Social for entertainment ideas that are generally 50% off or more.
- Consider an annual membership for places you enjoy the most. Often annual memberships will pay for themselves in two visits, giving you inexpensive entertainment for the year or season.
- Frequent the library. Instead of buying or renting books, DVDs, or video games, check out the library’s collection.
- Plan ahead for vacations and consider alternate destinations that will provide a great trip at a much lower cost.
Save money on everyday living
- Barter for services you want and need.
- Maintain homes, appliances, vehicles, and tools to increase their life.
- Combine trips to save on gas.
- Take advantage of all the company benefits offered.
- Put a system in place to track spending either manually or with an app.
- Stick to a set monthly budget.
- Use cash instead of credit cards to pay for purchases.
- Automate savings by auto drafting a small amount each paycheck to a savings account.
Setting goals and tracking spending will help you find more money that can be used to build your savings. You will be able to see where money is going to better prioritize spending. Thinking outside the box will allow you to customize a savings plan to fit your lifestyle.