The New Year is just around the corner. In the wake of 2014, we have the exciting opportunity to grab hold of a new year of promise, and start anew on all of the resolutions we broke in the year past. So while you pledge to give up smoking, skip the elevator and take the stairs, and eat healthier, consider your financial health. Are your finances in tip-top shape? Here are some simple resolutions to make in 2014.
1. Take free money and save it!
Whether that means growing your tax refund, saving monetary gifts from holidays or birthdays, or setting aside your holiday bonus, take any unexpected income and put it into a savings account. It was a supplement to your regular income – therefore if you tuck it away you won’t miss it.
2. Pay off high-interest debt
Debts that accrue interest over time can deal a major blow to your savings. According to the Federal Reserve, in April 2013 the average credit cards debt equaled $3,364 per U.S. adult. If you paid just the minimum amount due ($67.28), it would take you over 19 years to pay off this debt. And you would pay a total of $7,618.64 over this time, that’s $4,254.63 more than you borrowed. Try paying off high-interest debt using the “debt avalanche” method: During this process you tackle debts in order of the highest interest rates. This method will allow you to pay less interest overall.
3. Start paying with cash
Impulse buying with plastic is an interesting phenomenon. When we purchase something that isn’t a necessity, or that we haven’t saved for, typically the process is simple. We don’t consider where the money is coming from or how much we have left. If you’re anything like me, having a debit card is a blessing and a curse. On the one hand, you have easy access to your funds when you need them, and you don’t have to worry about carrying around or misplacing cash. On the other, having cash allows you to actually see the money leaving your hand for items that you probably don’t need (i.e., a new pair of shoes, a fourth latte). Start paying for things with cash and you’ll likely reconsider buying superfluous items, and stick to the basics.
4. Analyze your spending
This is simple enough. If you track or monitor your spending, you can find out where you need to cut back, and where you can afford to save a little more. For example, if you find yourself buying coffee every morning and lunch every afternoon, consider one or the other! Or bring your coffee and lunch from home! If you’re having a difficult time cutting down on spending, check out our 54 ways to save!
5. Stick with a budget
No one likes the “b-word.” Having to calculate your monthly expenditures before they happen at times seems like an impossible feat. I often find myself exclaiming, “My budget isn’t the boss of me!” But if you create a realistic spending plan, even the tightest of budgets allow for some wiggle room! Consider everything you HAVE to pay for on a monthly, weekly, or bi-weekly basis, and decide on a set amount or percentage to save every pay and save automatically. Then factor in the unexpected stuff, and then you can decide how much to allot to the fun stuff, like entertainment, date nights, etc.!
As always, if you need help with your savings goals, America Saves has a great free text message service to keep you motivated to save! Sign up today!