New Year’s Resolution: Develop a Savings Plan

The following is a guest post. Enjoy! 

If you are looking for a great opportunity to start being more financially aware, the New Years is a great time to do so. Although in truth, it is always a good time to start saving and panning, often times people enjoy the idea of starting fresh when the year is new. However, if your New Year’s resolution is to start saving more money, you need to assure that you have an actual plan in place. Having a plan will allow you to keep on pace, while hitting milestones along the way. And if you keep on that pace for the entire year, you’ll be able to look back when the year is over and be proud of the financial savings that you made. Here are some ways that you can develop a savings plan for your New Year’s resolution, in order to have more money when the year is up.

Budget

The first thing that you can do to better prepare yourself for setting aside a savings plan, is to set up a budget. Setting up a budget in the middle of the year can seem intimidating, so at the beginning of the year, you have no reason to not set one up. For your budget, factor in all of your monthly expenses that you can’t avoid. This includes living costs, transportation and food. Then take a look at all of your extra costs, such as cable, clothes, going out with friends, or anything else that could be cut back on to save more money. Once you have everything laid out for what you spend monthly, subtract that from what you make from your job on a monthly basis. You can then adjust how much you spend, and where you spend it, accordingly to how much you want to save.

Have a Set Number

You should have a set financial number as a goal that you’d like to save by the end of the year. You can then break that down to a monthly goal, and then even as far as a daily goal. In doing this, you can have a better idea of how much money you can spend and save on a daily basis. Also with this, you can get an idea of how you may need to make up for days that you spend too much, by spending less on other days. It doesn’t hurt to overestimate this goal either, as you can then prepare for financial issues that may come your way. After all, things happen and you sometimes have no choice but to pay for them.

Avoid Pressure to Spend

If you get a tax return during tax season, it can be a great financial gain. However, don’t feel pressured to go out and spend that money. Instead, consider how you can put it aside so that it can add to your savings. This is the same if you get a raise at work or a bonus. You should consider the fact that if you can make it by on a certain amount each month, there is no need to change that number just because you get a break. Instead, consider how that money could be better added to your savings goals.

Stay Away From Credit Card Debt

One way that people try and save cash, is by taking out credit cards and using the money that is allocated on there. This can be a bit tricky, as you see your bank account start to rise and don’t comprehend the amount of money that you are actually racking up on your credit cards. Instead, try and stay away from spending tons on your credit cards. Instead, use them only when necessarily and try your hardest to pay them off as quickly as possible. Some credit cards can be beneficial, especially if they offer cash back rewards, it can add to even more savings, but if you don’t pay them off then you are looking at some serious interest rates that could cut into your financial plans.

Saving money can be hard and a challenge for some people. After all, if it was easy, then everyone would be doing it and they’d have a better idea of financial management. However, by simply planning out one year in advance, you can make some serious improvements in your own financial standing. And the best part is that after you make these changes for one year, you’ll be surprised to find out how quickly the habits become normal and become a part of your yearly routine. But in order to get on the right path, you have to get started now. Consider the tips listed here for better financial management and to develop a savings plan for the future.