New Year's Resolution: Save More Money (It's not Rocket Science!)
It’s possible, with all the holiday expenses piling up at this point that you’ve already decided on your New Year’s resolution: save more money. Gosh darn, 2015 is going to be your year to finally do it! But as we’ve mentioned in previous blog posts, saving money isn’t something you wake up one day and decide to do. It requires some planning and a little sacrifice.
Let’s take a look at how you can plan to save money, and then how you will actually do it.
Get back to the basics: make a budget
Budgeting is so simple, yet we think it is so hard to do. This is probably because we think it involves a lot of hard work (kind of true), and possibly because it will point out any bad financial habits we have.
Do this: total up all of your spending for one month using your Online Banking account and saved receipts. Then, total your income for the month. Now move to the next step.
Evaluate your lifestyle
Do you really need 500 cable channels when you could save $25 per month by getting only 100? Why do you eat out so much? Do you really need that large of a data plan for your mobile devices? Evaluating your lifestyle once you have your budget in place gives you a better sense of where you can save a few dollars, or maybe even a larger chunk of change.
Do this: separate all your expenses out by categories and necessity (you can also use Budget Plus in your Online Banking account to help). From there, determine where you can save.
Set up recurring transfers
Automatically transferring money from your checking to your savings account takes the humanity out of this process, which is good because our brains are wired to love larger bank accounts.
Do this: set up a recurring transfer from your checking to savings account for a set amount (it works well to do this on paydays).
Pay down high-interest debt
This may seem counterintuitive as it requires you to spend money. However, by being as aggressive as possible with your high-interest debt, you dramatically decrease the amount of interest you pay over time.
Do this: use this calculator to see how much it takes every month to pay down your high-interest debt.
As we said, planning to save more money is the easy part; the doing is much harder. Use the above steps to set a realistic goal; you can always adjust your goal as you go along. If Lincoln Savings Bank can do anything to help you save, call or come by your nearest LSB office today!
Lincoln Savings Bank, member FDIC