At some point, this has topped all of our lists as a New Year’s Resolution. Come January 1st, we have money on the brain. After all, we’d just spend a lot of it on Christmas gifts, dusting off the credit cards, or just adding to a mountain of debt. Tax season is about to be upon us and we are looking forward to a possible windfall…or, a possible check made out to the IRS. However your year went, saving and spending smart is always a good idea. Saving is no fun, but we’ve compiled some tips to make it as painless as possible.
1. Create an emergency fund.
Ok, we admit that this might be the most difficult one to do, so let’s just get it out of the way. Suze Orman, finance expert recommends that you accrue six months worth of living expenses, should you lose your job, or have some catastrophic occurrence in your life. We understand that this is easier said than done and in a perfect world, we’d all have a nice, fluffy savings account to ease the pain of worry that occurs when something awful happens. Make a reasonable goal for this year and then add to your goal next year. Put away a month’s worth of living expenses, and next year make it two.
2. Use cash.
Take out an allowance once per week. You’ll have a pocket full of cash and will be MUCH more mindful of how you spend it. You might end up changing some habits, like making your lunch instead of forking over ten dollars daily.
3. Make a budget spreadsheet.
You can use an excel sheet or download one off the internet. It’s no fun to do, but using even just for a few months will give you a handle on how you make versus how much you spend. Facing that pair of boots you bought on sale but couldn’t really afford is much harder when the numbers are staring back at you.
4. Write a check to yourself.
When paying your bills, put aside an extra monthly cash for yourself. Put this money into a retirement account.
5. Divide up unexpected income
Equally in three ways: past, present, and future. Pay down debt, replenish your bank account and save some for the future.
6. Be realistic.
Most people’s resolutions last only a month or two. Make manageable expectations that might result in a few changed habits. Next year, you can start again and add a few new goals to your list.