Setting up a gameplan to save cash this year
When December rolls around, people typically take a pen and start scribbling down a long list of New Year’s resolutions.
Often, those optimistic goals include “saving money.”
And, while those plans are wellintended, by February, savings accounts are often stagnant and spending has skyrocketed.
Set a savings goal: On New Year’s Day once your headache from all that champagne subsides set a savings goal for 2017. Your goal should be measurable, achievable, realistic and timely. You might feel really ambitious and set a superhigh savings goal, but you’ll also be setting yourself up for failure.
When deciding on a savings goal, think of a specific purchase or benchmark you could reach in 12 months. The goal should require self-discipline and a little sacrifice when it comes to spending, but you shouldn’t overreach. Then, find a friend or family member who can hold you accountable, or write the goal down where you’ll see it every day, like your planner.
Choose an account carefully
Be picky about where you keep your savings. Savings accounts vary widely when it comes to interest, fees and minimum balances, so do your research and find the one that’s perfect for you. Take into consideration extra charges like monthly service and ATM fees. While the interest rate might sound minimal at first, it adds up. And every little bit counts when you’re saving toward a specific goal. Check out online banks too; online savings accounts sometimes have higher interest rates.
Create an emergency fund
While your savings account might double as a rainy-day fund, if you’re super savvy about saving you’ll have a fund dedicated solely to emergencies. Your savings account might be for big purchases, like a down-payment on a car, but you should not touch the money in your emergency fund unless there’s an actual emergency. If you lose your job, for instance, you’ll have something to fall back on without having to sacrifice that big purchase you’ve been saving for.
Monitor monthly expenses
Start tracking your monthly expenses. For one month, track every single purchase. You’ll know exactly where your paycheck is going and which areas you’re overspending on. You’ll feel more in control of your money, and it’s a key step toward forming a realistic budget that you can keep to.
Be smart in shops
When you go shopping, be savvier. Rack up the rewards by signing up for loyalty programmes at your go-to stores, sign up for a warehouse club and buy in bulk, clip coupons when you can, and plan your shopping trips around sales and daily deals.
Check your progress
In order to save effectively, you need to know exactly where you stand with your finances each week. Make a money date with yourself every week and go through your transactions.