As the year is coming to a close, we often reflect on how we can improve our finances and talk about how we can start to save money. Well, talk is cheap. The key to saving money is actually making a savings goal and sticking to the plan.
Here are 6 tips to make savings goals and keep them:
1. Set Realistic Goals
We all have goals, but there’s a difference between dreams and goals. Many people dream of saving for a large purchase or for retirement, but they don’t set realistic goals and put a plan into action.
First you need to set up a budget listing all of your income and expenses. If you find that your expenses are close to your income every month it may be time reduce some of your expenses like cable, cell phone, or entertainment. Just by reducing these bills you will find a couple hundred dollars per month to put towards a savings plan.
2. Use Financial Tools
Online money management sites like Mint.com can help you get on track and save. Mint is a free money management service that helps you organize your spending, create and accomplish goals, and stick to a plan. These are the most important elements necessary to help you reach your savings goals.
3. Reduce Credit Card Use
Many people pay for things with credit cards that they could pay for with cash. Sure, there are great rewards and cash back credit cards out there that can make using those cards worthwhile, but the reality is not everyone has the discipline needed to use credit cards and pay them off.
Most people carry an outstanding balance on their credit cards each month, so simply paying cash or debit cards could potentially save you between 10 and 50 dollars a month that would otherwise go toward interest on the balance. It might not seem like much, but it adds up over time.
4. Use Coupons
You would be amazed at the savings you can rack up just by clipping coupons for items you frequently purchase. Using a handful of coupons for items you regularly buy anyway could save you ten bucks a week at the store.
That might not sound like much, but that’s close to $500 a year in savings on the things you buy anyway. That would make a nice IRA contribution.
5. Consider Paying Down Bills instead of Vacationing
We all deserve a good vacation, but sometimes you need to make sacrifices if you have more serious issues looming.
Some people spend thousands of dollars each year on vacations while still drowning in debt or having nothing set aside for retirement. One great way to get a vacation and pay down debt is to travel locally.
You can still have a relaxing and enjoyable vacation without spending thousands of dollars. Check out local attractions and explore local locations you’ve been wanting to visit instead. You might be surprised at what you’ll find.
6. Make Automatic Deposits to a Savings Account
Most people have very little money set aside in savings. If you look at what you have left over after your expenses every month you can figure out a set amount to have automatically deducted from your paycheck and deposited into your bank account.
By making your savings contributions automatic, you don’t even have to think about it and the money gets put away safely. Again, it doesn’t take much. Just 20 dollars a week will put about $1,000 into your savings account a year.
By trying these six savings tips and sticking to them you will be on your way to your savings goals and more money in your pocket.