Want to do better with your money this upcoming year? If you’re like most of the U.S. population, you’ve got less than $1,000 in your savings account, under $100,000 in your retirement account, and you still haven’t set up a will.
America…we can do better!
6 New Year’s Resolutions That Will Save You Money
If you really want to do better with your money this upcoming year, then start getting serious about the six resolutions below. They’re not complicated and some of them could be accomplished in less than a week! But, if you hit them all within the next year, you’ll be FAR better off 10 or 20 years from now.
1) Plan for unexpected income
- Reimbursement for over-payment (often happens in medical billing)
- Tax return money
You forget about this random income because it’s so easy to spend. The mentality is often, “Well, we didn’t plan on this money and really don’t need it, so let’s go to Vegas!” You then put it all on red, lose your shirt and then some, and head back home with nothing.
Alright, your life may not be exactly that crazy, but the point is, unexpected money falls through your fingers WAY FASTER than money you earn. The key is to mentally spend it before you get it. Sounds counter-intuitive right? Let me explain how this works.
Given your goals for next year, physically write down a list of how you would spend your money as it comes in. Let’s say – for the first $100,000 that you might receive unexpectedly.
Your list might look something like this:
- $1,000 – put into savings account
- $24,000 – to pay off consumer debt
- $15,000 – for a full emergency fund
- $20,000 – into retirement account
- $20,000 – for kids’ college fund
- Remaining funds – toward the home mortgage
You can always switch it up a bit when you receive the money, but at least this gives you a reasonable alternative to Vegas. 😉
2) Save Up $1,000
It absolutely blows my mind that most of us have less than $1,000 in our savings account. It’s pretty obvious that our safety net has become the credit card.
Here’s how life typically plays out these days:
- The car needs a new transmission – $1,800
- We look in our bank account -Ummm, nope, not coming from there!
- So we pay with our credit card
- The credit card balance jumps from $3,500 to $5,300
- Annnd, we pay it down little by little, and then the next emergency happens
- The credit card never gets paid off
Here’s a better way:
- Work hard, maybe even extra jobs to put $1,000 in the bank
- Experience an emergency
- Figure out how to fund the emergency with the money you’ve got
- Never go into credit card debt
- Keep making a dent in your consumer debts
- And ultimately, grow wealthy 🙂
I found a way that almost everyone can save up $1,000 in just 4 weeks. Check it out here:
3) Start Budgeting
You want to know how I figured out how to save hundreds of dollars a month? I started to budget – simple as that.
I’m one of the cheapest people I know (if not the cheapest), and I was overspending on things I didn’t even realize! That is, until I actually wrote down my expenses. It was then that I started to see the actual numbers and began to question how much I was actually spending in certain categories.
After listing out my expenses, I started to question my:
- cell phone bill
- car insurance
- home insurance
- grocery bill
- utility bills
I made some adjustments and easily saved $25-$50 in each area. BOOM – $250 of savings each month. Anyone can do it if they just take the time to write out their budget.
4) Pay Down Debt
We all want to pay down debt, but it can be hard to find the motivation to get started. If you really want to tackle your debts, you’ll need to have a reason why. If you don’t, you’ll quickly fizzle like the rest of the nay-sayers.
With an excellent reason why, you’ll then just need to tackle your debts smallest to largest. It’ll pump you up as you cancel out those smaller debts and keep you going to take on the bigger ones. It’s not rocket science…it’s emotional management.
Resource: The Absolute Best Way to Get Rid of Debt
5) Change Where You Shop
The average household in America spends between $550 and $600 a month on groceries. If you’re nodding your head to this, you are probably wasting $200 a month and should really change where you shop.
I ran the analysis and studied various supermarkets. A family of four can eat quite well on just $400 a month, You know the secret? Aldi — an inexpensive grocery chain. No frills, no catering to your every needs, and incredibly speedy cashiers (because they’re smart – the faster they get you out, the more buyers they can squeeze in). It’s amazing. Want to save money? It’s as simple as changing where you shop for your groceries.
6) Reduce Your Insurance Costs
We have insurance on everything today.
- our home
- our car (because we have to)
- our lives (probably the right thing to do)
- our children
- our toys
- our electronics
- our cell phones
The list goes on and on! If we think it might break in 100 years, we buy the insurance. Do you know why? Because we don’t have any money to buy a new one!
We don’t have any money, so we spend even more money on insurance to cover the cost of the new (probably unnecessary) item. Oh, and by the way, we typically end up spending more money on the insurance than we would have if we actually paid cash to replace the product.
Dumb, dumb, dumb….
Here’s what you should do. Save up $1,000 and cancel some of that ridiculous insurance (warranties on electronics, on your cell phones, etc.). Then raise the deductible on your house and the car to $1,000 (since you have that money in the bank anyway). This will save you a decent chunk of change in monthly premiums and allow you to cancel debt faster, save faster, and become unbelievably wealthy.
So what’s it going to be? Is it going to be another year of the same ol same ol? Or are you actually going to get mad and make a change in your financial life? Which of the above things are you going to tackle this year?? Tell us in the comments below!
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.