As the countdown begins and you start to look forward to the next 12 months, people around the world are planning their New Year resolutions.
One of the best promises you can make is to save money this year – through budgeting, cutbacks and smarter shopping. Start your year with a bang with our top five money saving New Year resolutions:
1. Create a budget for the year
Being organized with your money from the start of the year will help you budget better. Here’s a quick guide to planning your budget:
- Tally up your total income after tax. Work out what you earn annually, including any extra income sources, such as child support or interest.
- Calculate your expenses. Include all the regular payments you make each month, from rent to groceries.
- Plan the big-ticket payments. If you’ve got a holiday booked or plan on moving house, think about any large costs and how they will affect your plan.
- Set a goal. Be realistic and think about what you want to achieve. This could be to have X amount in savings or to pay off credit card debt.
- Create an action. With a goal in mind, your income and expenses laid out, figure out what you need to save each month to realistically meet your goal.
- Track your progress. Keep a record of what you manage to save each month, along with any other costs you hadn’t planned in.
If you don’t know where to start, there are lots of budgeting plans and trackers available online, such as this budget worksheet.
2. Look through last year’s spending
Another way to save money is reviewing what you spent last year. If you regularly use a bank account, print out your annual statement. If not, start jotting down any recurring or big expenses from the past 12 months.
This should give you an idea of any unnecessary purchases and what time of the month/year you spend the most money.
It’s also a great opportunity to look through your running subscriptions and memberships to see if there’s any you can cancel to keep the costs down.
3. Start an emergency fund
The new year is a great time to start a rainy day fund ready for when a disaster or emergency strikes.
Set yourself a goal of how much you want to save and start small, slowly building up your savings over time. If you’ve struggled with saving in the past, start off setting aside just $1 a week and then add another dollar each week until you eventually reach $52. At first it may not seem like much, but it’s good for getting you into the habit of putting money away in savings. Plus, by the end of the year you’ll have saved $1,378.
Keep these funds in a safe place but separate to your daily expenses, so you won’t be tempted to go on a spending spree with them.
4. Limit those small luxuries
Instead of giving up something big for New Year, try to limit the amount you spend on unnecessary luxuries
If you’re prone to grabbing a coffee on your way to work each week, reduce it to a monthly treat. Instead of splashing out on another new outfit, look for a nearby clothes swap store or event and trade your old clothing for something new, without it costing a cent.
Cooking from home instead of relying on takeouts and restaurants is also a great way to save money and brush up on your cooking skills.
5. Take advantage of reward schemes
America is a consumer paradise, meaning for every brand that pops up, several more are competing against it. This makes it easy to find better deals and discounts on your purchases by shopping around or signing up to a loyalty program.
Reward schemes give back to you for sticking with that brand, usually by offering you a range of discounts, offers and incentives (from coupon books to cashback).
An easy way to save money is to compare before you buy. While it would be nearly impossible to check the price of each grocery item you purchase at every store, it can be beneficial to do so for bigger purchases, such as electronics or furniture. This allows you to find the cheapest one and, in some cases, brands may match that price or make theirs cheaper just to beat a competitor.