It’s that time of year again when we promise ourselves that next year will be better, healthier and more productive than the last. Goals to lose weight and quit smoking always come before saving money on most lists, so how do you go about creating, and actually sticking to, your savings plan? Here are some ways to help you stay on track with your financial New Year’s Resolution.
Create a visual assessment
Start by calculating your monthly expenses in 2013. Try a “Homeland” or “Scandal” style bulletin board (minus the crime suspects), and post up all 12 months so you can see them at the same time. See how Claire Danes does it:
Don’t want to take up an entire wall in your living room or home office? Use the refrigerator to track your expenses.
Note the whys and whens
Take a look at which months had the highest spending and the reasons behind that. Was there a family reunion you had to fly out for? Did you or someone in your family become ill? Or did you splurge on shoes one boring summer weekend? There are expenses that can be helped, but there are those that can’t and you shouldn’t feel guilty about. Which leads to…
Build an emergency fund
As we all know, life is simply unpredictable, so at the risk of sounding like a TV commercial for insurance, set aside a chunk of money only to be used for that seriously rainy day. Or put away a bit of money once a week if that’s more feasible–10 dollars set aside in a piggy bank each week equals over $500! But decide on an amount that you will be saving each week and stick to it.
You can have your bank do a weekly automatic transfer from your checking account to your savings account, no piggy bank needed. We all know that it’s a lot easier to save money when you don’t have to remember to move the leftover cash to savings yourself. Not only that, you learn how to work with less money each month if you start with less. Some banks even have programs like “Keep the Change” that will round up the price of each debit card purchase and transfer that difference (that extra change) directly into your savings account–a few cents a day goes a long way!
Set one BIG goal
Even if you have several financial goals on your mind for 2014, take your biggest, most formidable sounding resolution, and break it down. Whether it’s saving up a certain sum for your child’s college or cutting down your energy bill for the year, deciding on just ONE major achievement will help you focus on actually getting it done. Once you’ve decided on your big goal, take one step toward it per month, or even one step per week if you can. Set aside the date and time during which you will accomplish this step.
Maybe you’ve made a resolution to skip the Starbucks once a week, or to have family game nights instead of going out all the time. Don’t forget to introduce new money-saving habits into your routine too, like setting aside $10 each week or aggressively using a piggy bank. By starting out with just a small and manageable dose, you won’t go cold turkey and want to run back to your old non-saving ways.
Out with the old—and the no longer used
It’s a new year, so give yourself a fresh start by cutting out one item from your monthly bills. Be firm and figure out what one service or product you could live without. Is there a magazine that you get every week or every month but are no longer interested in? Do you have 500 channels, but you mostly just watch movies on Netflix? Or do you have Netflix and barely have time to use it anymore? Cancel, remove and reduce those underused and overpriced services.
Expunge the extras
No need to wait for spring cleaning. Take advantage of that post-Christmas feeling of wading through the swamp of “new stuff” in your house. Assess your stuff status. If you were gifted a new phone, new clothes or new kitchenware, then it’s time to get rid of your old items. You can either sell them at a garage sale or a thrift shop, give them away as hand-me-downs or donations, or drop them off to be recycled. Doing this can help prevent you from clutter and confusion in the home, which can lead to buying things that you’ve lost track of or forgot you already had.
This year, take the time to focus on making a financial resolution that you can maintain for the whole year—and many more to come.
This article was written by staff writer Suchi Rudra. Her mission is to help fight your evil debt blob and get your personal finances in tip top shape.
Photo: College Magazine