The new year often inspires us to aim for a fresh set of goals, including saving more money. If growing your bank account is one of your ambitions for 2015, these tips and tricks will help get you on the right path.
- Have clear goals. Know what you’re saving for. How can you reach a goal if you don’t know what the target is? Having clearly defined goals will help you stay motivated with your savings plan. Want to save for a home down payment? Great. Then figure out how much you need, by when, and how much you need to save every month in order to reach that goal.
- If you receive a Christmas bonus or extra cash this year use the rule of thirds to determine how to use it: One third for the past. Use one third to pay down debt you owe & one third for the future.
- Calculate the cost of your time.One of the best things I ever did was calculate the cost of my hourly rate. That way, when I am out shopping and I see a pair of shoes I want, I ask myself how many hours will I need to work to pay for them. If your hourly rate is $15, and you see a pair of shoes for $120, that pair of shoes will cost you eight hours of work.
- You will want to create a separate savings account dedicated to your emergency savings account with 6 months of expenses available in case of job loss, medical emergency, car repairs, etc. This account should not be touched unless it’s an EXTREME emergency. So if you spend let’s say $3000/month, your emergency fund should have $18,000.
- Make goals and stick to a budget. Mint.com is a great place to start to help you stay on track!
- Cook on a budget . Prep and plan your meals for the week. Cooking at home more frequently can really make a difference. It’s not only a healthier option but it is also cheaper and a great way to cut back on spending.
- Become a smarter shopper and only buy what you need, not what you want.
- Automate your savings account & set up sub savings accounts for your various short term saving needs. Some needs that come to mind are: wedding, house down payment, vacation.
- Be smart with your tax return
Save on your electricity. Small changes will help you decrease your electricity bill. Make sure to turn off the lights when they aren’t in use, don’t leave the TV on all night, and switch or unplug devices when they aren’t being used.
Stay on track: Finally, when you have everything in order you might be tempted to expand your spending just a little but you always need to be mindful not to allow yourself to slip into your old spending habits.
Did you know that buying coffee daily compared to brewing coffee at home could save you over $350 a year?