15 Savings Techniques for 2015
By Daniel Boylan, Instructor of Finance, Ball State University
Each year, many of us make optimistic New Year’s resolutions. Though well-meaning, we tend to abandon them in a few weeks. One way to be more successful is to create an achievable plan.
Savings isn’t just about putting money in the bank; it can be accomplished in many ways, all of them helpful to the individual. This list of money saving techniques is broken into three distinct styles of savings: (1) restricting purchases to prioritize need rather than want, (2) reserving money for later, and (3) reducing the cost of needed items bought.
Identifying your wants versus needs:
- Kick a bad habit and put the money you would have spent on that habit into savings.
- Return any gifts you won’t use and put any store credit towards items you need.
- Plan your purchases in advance by making – and sticking to – a budget.
- Take advantage of free resources and entertainment, such as parks, libraries, or other community venues.
- Practice and perfect the art of saying “no.”
Reserving money for goal-based and/or high priority items in the future:
- Maximize your 401(k) or 403(b) deduction and take advantage of any contributions or matching from your employer – it’s free money!
- Hide your savings from yourself by transferring money into a separate bank account, particularly in a financial institution you don’t access regularly – out of sight, out of mind.
- Increase your tax withholding - this won’t increase your taxes, but will increase your tax refund the following year.
- Put money away for your child’s education with a College Savings program or a 529 plan.
- Stash the extra cash left behind in your car, home, purse, or pockets.
Getting the biggest bang for your buck – and saving the difference:
- Pay above the minimum on the mortgage each month.
- Wipe out credit card debt by paying down balances.
- Buy store brands rather than name brands.
- Use discount websites and eBay.com for in-store and online purchases.
- Make your home more energy efficient and consider weatherproofing against the elements.
No need to be overwhelmed by the list. By picking a few of these techniques and sticking with them, you can create good habits. Later other items can be adopted and used. In the end creating a better savings pattern, increasing confidence, and creating optimism for your future.