That may not be completely true, but looking at your expenses and budget from last year might have you thinking that it's time to save more money this year. During your fresh start, keep these tips in mind to cushion your savings:
1. Be specific with how much you want to save. From the start, set an amount that you want to have saved by next year. From there you can set monthly increments to meet as you work closer, and closer, to that final number. Saving on a whim is not very beneficial in the long-term. With no specific amount or goal in mind, there's not a huge ability to track your progress or figure out how much needs to be saved on a weekly or monthly basis.
2. Answer the big question of how you are going to save money. There are many methods that can help you save money. It's important to determine what makes the most sense for you. A few options to consider:
- Cutting out unnecessary expenses. We all have areas in our life where we can cut out those unnecessary buys. This could be ending your daily trip to your favorite coffee shop, or cutting back on any online spending.
- Find work on the side. If you have extra time in your work week, finding a side gig for extra money could be a good option for you. Whether it's freelancing, or an extra waitressing job, dedicate the funds made there to your savings initiative.
- Sell your stuff. Have extra clothes you've been meaning to sell? An old prom or wedding dress that is still in good condition? There are a multitude of websites and apps that now allow you to sell a menagerie of things. It does take a little more effort than simply dropping stuff off at Goodwill, but will earn you extra cash in the end.
3. Set mini-monthly goals. As stated before, set a monthly goal. This will be easier than forging ahead without a plan to get to that ultimate number. With mini-monthly goals and thresholds along the way, you will stay consistent and feel less pressure as you put away your money.
4. Figure out where to put the new funds. As you build up your extra funds, find a secure and beneficial place to store them (so not under your mattress). You will want the money to build interest as it sits. Here are some options to consider:
- Savings Account. Basic but efficient, with a savings account you'll earn interest on the account, but not at an awe-worthy rate. You will still be able to touch and move around the money if need be.
- Certificate of Deposit (CD). When you place your funds in a CD, you will not be available to withdraw until you've reached your allotted amount of time. This can be a good motivator to not touch it, but in case of emergency it may cause a hindrance.
- Money Market Account. Money Market accounts have beneficial interest rates attached to them; however, can carry restrictions regarding how much needs to be initially put in the account and how frequently/how much the holder can withdraw. If you are confident you can keep it there without strongly needing the funds, this could be the right option for you.
5. Stay strong and track your progress. Sticking to your savings goal can be hard, especially in the beginning. Using online financial tools such as Central Bank's Money Manager can make it easier to visualize how far you come and how much you have left. It pulls all of your accounts together, so you can look at your finances as a whole and figure out if you are meeting those monthly requirements.
As you create your savings strategy, keep these five tips in mind to meet and exceed your super saver goals!