New year, new you! At least that’s what you are hoping for. You and your wallet have survived the holiday season and now you’re ready to make a 2022 resolution to reach your financial goals. Perhaps you want to pay off debt or maybe you wish to travel more. Whatever your financial goal may be, it all comes down to one main thing: saving money. Because that’s probably easier said than done, we put together a list of things to help you reach your savings and financial goals.
Tip #1: Get Organized: It’s time to get real personal with your finances and expenses. Start by using a planner or calendar to track all of your bills, due dates, paydays, tax deadlines, and even when your bank statements become available. Mark each bill you have and when it is due. If available, consider setting up autopay with the vendor directly or through your bank. This can help you save money by eliminating the chance of making late payments and having to pay late fees and interest. (Some companies may even offer a discount for setting up autopay!) Every little bit helps! Know when your bank statements become available and make it a habit to review this with any other account owners (such as a spouse or elderly parent). Aside from bills, see where else your money is going and consider cutting unnecessary expenses.
- For example, many people often find the amount of money spent on eating out and groceries to be way higher than planned. Use your statement as one of many tools to get knowledgeable about your financial situation.
Tip #2: Make a Budget: Although budgets sound intimidating and slightly constricting, try to see it as a great tool to meet your goal! A budget really is your friend and can empower you to make informed choices. You can easily make your own budget by listing all of your expenses. This includes all of your regular bills like utilities, rent/mortgage and insurance along with other monthly charges such as internet or streaming services. Once all of your monthly bills are accounted for and listed, you need to list extras such as groceries or toiletries. But most importantly, you should also recognize recreational and elective charges such as family movie night, or dance class for your child. Once all of your monthly expenses are listed, you want to compare it to your monthly income. This income can be from employers, child support, unemployment, or any other money you receive on a consistent basis. Once you see the money coming in versus going out, you can determine how much surplus you will have each month. Determine an amount from this surplus you want to put aside to reach your financial goal for the year. Remember to give yourself a little wiggle room in case a life event or emergency.
- You can also get free budgeting templates online, from your local bank, or accountant. Templates can be beneficial because they are designed to eliminate possible errors. It is also clearly laid out and organized, making it easy to refer to and update.
Tip #3: Take Advantage of Savings Programs: When looking to build your savings, find a savings account that is worker harder for your money! Rate shop and find a bank that offers the highest APY. Why get an APY of .01% when a bank right down the road is offering .30%? Consider how much more interest you can make on your money over a longer period of time.
- Some banks who are mainly online driven offer higher APYs for their customers. There are also a variety of websites that compare all of the main competitors so you can see the best fit for you all on one screen.
Some banks also offer programs to help you save without feeling the pressure on your bank account. For example, banks may round up the change from each transaction and put that money into your savings automatically. Change adds up fast! Over the course of a month or year you may have hundreds of dollars saved up without even making a conscious effort to save.
Tip #4: Get Creative: After making a conscious effort to save (or earn) more money, you can also get creative to help. Here are just a few of many things you can do to put extra money aside:
- Keep Your Change: If you pay in cash, set aside the change you get at the end of each day. Make it a goal to exchange your coins for cash on a regular basis such as monthly or quarterly. Before using the nearest coin counting machine that takes a huge cut of your funds, see if your bank can accept loose or rolled coin for no fee.
- Sell: Considering hosting a few yard sales throughout the year. Get rid of anything you no longer need or want. If you have a hobby, consider making some extra cash from selling your product. Perhaps you make baby blankets, or work in a wood shop in your spare time. Rather than just doing it for fun, reach out to family, coworkers, or neighbors to see if they have any needs you can fulfill and make a sale!
Tip #5: Price Shop: Now is the time to see all of your current expenses and determine what could possibly be reduced or eliminated. Bills such as car insurance, internet, streaming services and even gym memberships seem to increase annually. Although a bill may only go up a small amount, over the course of a year or even two or three years, if you don’t look at other competitors, you may have completely overpaid. Often times you can purchase the same services through another company for a much lower introductory rate! Once your introductory rate is over, consider switching once again. Also look at bills you are paying for but maybe don’t need or take full advantage of. Perhaps you have a gym membership for the last year but have only attended a few times. Consider if it is worth having that monthly expense over cutting it. Perhaps you are paying for cable TV but only seem to watch movies on a streaming platform. It may be time to cancel your cable service and pocket that cash instead!
Because all financial goals start with saving money, it’s important to have the tools to know how to successfully do that! People say, “Save more money,” but that doesn’t really help you get started or accomplish your goal. Hopefully with help from these tips, you really can save money and reach your 2022 financial goals.