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:

  1. Kick a bad habit and put the money you would have spent on that habit into savings.
  2. Return any gifts you won’t use and put any store credit towards items you need.
  3. Plan your purchases in advance by making – and sticking to – a budget.
  4. Take advantage of free resources and entertainment, such as parks, libraries, or other community venues.
  5. Practice and perfect the art of saying “no.”

Reserving money for goal-based and/or high priority items in the future:

  1. Maximize your 401(k) or 403(b) deduction and take advantage of any contributions or matching from your employer – it’s free money!
  2. 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.
  3. Increase your tax withholding - this won’t increase your taxes, but will increase your tax refund the following year.
  4. Put money away for your child’s education with a College Savings program or a 529 plan.
  5. Stash the extra cash left behind in your car, home, purse, or pockets.

Getting the biggest bang for your buck – and saving the difference:

  1. Pay above the minimum on the mortgage each month.
  2. Wipe out credit card debt by paying down balances.
  3. Buy store brands rather than name brands.
  4. Use discount websites and eBay.com for in-store and online purchases.
  5. 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.