With a new year, comes a new beginning. Maybe you've already started to think about what you want to accomplish next year and have some New Year’s resolutions like implementing a new workout routine, reading more books, or learning a new skill. While you're making positive changes in your life, it’s important to take some time to focus on your finances. Specifically, your savings.
2023 can be an opportunity to set a money-saving challenge for yourself. Stashing cash and building your savings all year long may sound daunting, but it can be easier than you think. You just need the right strategy.
Hit the ground running with these 12 tips. Ready, set, grow!
1. Start with a Budget
Saving money begins and ends with a budget. Sit down every week and decide where your dollars will go. Make sure your essential bills are paid, then put your savings account second on the list. The amount you're able to put back may vary from week to week, but it's important to make saving money a habit. Read our blog to learn how to live your best life on a budget.
2. Cut Out Extraneous Expenses
Paring down expenses goes hand-in-hand with budgeting. Consider finding more economical alternatives to your luxury items and services. For example, you may be able to save more money each week by switching from pricey cable services to an online streaming service. Or maybe there’s a discount grocery store in town that's less expensive than the large chain where you usually shop. And if you're eating out once or twice a week, try staying home instead.
3. Re-Channel Your Frugalness
Are you a coupon clipper? Digital coupons and store apps make it easier than ever to save money on the items you purchase regularly, such as groceries, cleaning supplies, and toiletries. Take advantage of reward card savings and coupons, and put those savings directly into your account.
4. Collect Your Change
A quarter may not seem like much, but multiple quarters can equal significant funds. Collect your change in one place, preferably in a clear container so you can visually see it add up. Then take it to the bank or a coin machine when the container is full. You’ll be amazed at how much it can total!
5. Shop Around for Lower Rates
You can probably find better deals on things such as car insurance, homeowner's insurance, and credit cards if you take time to shop around. Maybe consider a home equity loan in order to corral high interest rates. Or it may be time to bundle your insurance needs into one lower payment. It takes time to research for lower rates, but it’s so financially worth it!
6. Choose Automatic Withdrawal
You won't miss it if you never see it! Consider using automatic withdrawal options to stash a percentage of each paycheck. Set up an automatic transfer so once your check deposits into your checking account, a certain amount of it goes directly into your savings account. No manual process required!
7. Choose Pre-Tax Savings Accounts
Open a 401K or a 529 college fund to squirrel money away, tax deferred. As long as you meet the requirements of your accounts, you'll pay no penalties when it comes time to use them.
8. Maintain a Steady Cost of Living
Expecting a big raise? Try putting the excess directly into the bank. If you're able to meet all your financial obligations now, keeping that new money in your account won't be a burden.
9. Familiarize Yourself with Money-Saving Tools
There are multiple money-saving tools available, including apps that round up your credit card purchases and channel the excess directly into your savings account. Search for tools like these that make it much easier to save money.
10. Choose the Right Type of Savings Account
High-interest savings accounts will increase your savings more quickly. You can maximize the return on your money with a money market account or have an investment-based savings account like a certificate of deposit, which means they can fluctuate with the stock market. Others keep your money secure with a no-risk guarantee. Choose one that fits your goals and lifestyle best.
11. Take a Break from Paying Off Bills Early
Do you try to pay down balances early? While this is a great long-term strategy, it can decrease the amount of money you're able to save each month. Consider taking a six-month break from paying extra and pay yourself via your savings account instead.
12. Replenish Your Emergency Fund
It’s crucial to have an emergency savings fund and it’s recommended you have enough saved to cover three to six months' worth of expenses. If you dipped into your emergency fund for a medical bill or to replace tires on your car, be sure to replenish it.
Saving money is always easier if you're able to view your progress. Seeing a savings account or a retirement fund increase week by week is exciting! And the more you save, the more motivated you'll be to keep going. If this seems like a lot to implement, don’t get overwhelmed! Read some of our easy money saving tips for beginners. We’re here to offer tips, resources and guidance to help you build your savings. Contact us or stop by one of our locations so we can help you reach your financial goals.