12 New Year Resolutions That Are Simple And Help You Save A Lot Of Money
Leave the past behind and start the new year on fresh financial footing. Between debt, savings accounts, credit cards and more, there’s surely at least one part of your financial life that you’d like to improve. Whatever it may be, make it a part of your new year’s resolution. Here are 12 ideas that are simple and will help you save money. By tackling one goal per month, you can set yourself up for a financially fit 2019.
1. Switch bank accounts.
There are so many bank accounts out there now, and switching could mean more money in your pocket in 2019. Make it your first new year’s resolution to switch bank accounts so that you have a checking account with no fees or minimum balances, and a savings account with a high-interest rate. Some of our bank picks include Capital One 360, Ally Bank and Marcus by Goldman Sachs.
Pro tip: Have your checking account at one bank and a savings account at another. This may help prevent you from touching the money you move into your savings account.
2. Pay off high-interest debt.
High-interest debt, like credit card debt, can really add up if you don’t pay it down quickly. Make your second resolution to pay off at least one of your high-interest debt accounts ASAP in the new year. You’ll save money because you’ll pay less interest on that debt than if you took months, or years, to pay it off instead.
3. Schedule a meeting with a financial advisor.
The median American household had an average savings of $11,700 as of June 2018, according to MagnifyMoney by LendingTree. If that sounds like you now, or somewhere that you’d like to go with your savings, then you need to get more familiar with your financial situation and an advisor can help. Shop around at different companies, like Charles Schwab, Fidelity, The Financial Gym, Ellevest and more, and then schedule an appointment with a financial advisor. You’ll most likely pay nothing or very little to have them review your current finances and goals, and then offer advice on how you can save more and spend less.
4. Set up automatic transfers and bill pay.
The easiest way to save money fast is through automatic transfers. Sign up for these at your bank (and if your bank doesn’t offer it, consider switching), and move that money over to your savings account before you even see it in your checking.
Automatic bill pay is also a huge way to win at paying down debt. Sign up for this service and automatically have your credit card bill, Netflix bill, phone bill and more paid on time, every time. Just be sure to have the funds in your checking account.
5. Pay extra toward the principal on debt.
So you’re already paying down high-interest debt, like credit cards, ASAP this year. The best way to do that is by making extra payments toward the principal payment. Paying extra toward the principal will decrease the sum of money that the interest is calculated on, so you end paying less money in interest over time. For instance, if the total debt is $500 with an interest rate of 17 percent, you’d pay $85 in interest. However, if you make extra payments on that principal debt and lower it to $300, the interest you’ll pay is just $51, saving you $34.
6. Invest money every month.
Investing money may seem scary, but it’s really not. There are so many apps that make it easy and affordable. Start with just $5 per month on apps like Acorns or Stash, and you’ll be investing in no time. If you’re interested in stocks, try Robinhood, another app that let’s you invest money easily and with as little as just a few bucks.
Pro Tip: Investing money is a great way to supplement your savings account. Instead of saving $100 per month into a savings account, try saving $80 instead. Then take that $20 that’s not going toward your savings and invest it every month instead. You’ll have the chance to increase the value of that money in your investment accounts at a higher rate than if it was just sitting in a savings account. It probably won’t happen too fast, but overtime, the returns could be big.
7. Increase your retirement account contributions by just 1 percent.
This could be one of the easiest new year’s resolution to cross of your list. If you have an employer-sponsored retirement account, like a 401(k), increase your contributions this year. All you have to do is go into your online account and change the percentage of your income that you’re stashing away for retirement. Start by just increasing it 1 percent. It could end up being just a little more per month that you end up saving for retirement, but in the long run, it’ll make a huge difference. Plus, this is money that most likely comes out of your paycheck pre-tax, so you’ll lower the base amount that you’re taxed on even more.
8. Cut one expense from your monthly spending.
Imagine if you could stash away just $20 more per month for the next year. That’s an additional $240 saved by the time 2020 rolls around. You could do this by just cutting one expense from your monthly spending and saving that money instead. Maybe you skip one Starbucks latte per week. Or maybe you stay home one Friday night every month and say no thank you to happy hour with your work wife. Whatever it is, try to lessen your spending by just a little bit every month this year and save more instead.
9. File your taxes early.
Tax season is a super important time of year for you and your finances. The earlier you file, the sooner you know your income tax situation. If you’re set to receive money back from the government, then you’ll also receive it sooner rather than later. If you owe money to the government, then the sooner you file, the sooner you know how much money that is. If you file by February 1, and you find out you owe $1,000, you have until the April deadline (April 15 for 2019) to pay that money. This gives you extra time — about two and a half months — to save up that money and make the payment.
10. Negotiate a credit limit increase.
If you’ve had a credit card for a few years now and have been a responsible customer, paying your monthly balance in full and on time every month, you might be eligible for a credit limit increase. By increasing your credit limit, AKA the total amount that you can charge to your card, you may lower your credit utilization rate, too.
Your credit utilization rate shouldn’t be more than 30 percent of your total credit limit. So if you’re credit limit is $1,000, aim to spend no more than $300 per month on your credit card. Now let’s say you always follow this rule and spend no more than $300 on your credit card every month. If you negotiate a credit limit increase and now have a limit of $2,000, you lower your credit utilization rate from 30 percent to 15 percent if you stick to that $300 per month still. This looks great to the credit bureaus and can help increase your credit score.
11. Read one personal finance book.
Again, here’s a resolution that you could accomplish in just one month this new year. Aim to read just one personal finance book in 2019 and you could end up making smarter money moves for the rest of your life. Need some recommendations? “Broke Millennial” by Erin Lowry and “Money Honey” by Rachel Richards are good picks. Here some of our other favorites to consider.
12. Be more strategic with your credit card spending.
There are so many awesome credit card perks to take advantage of these days, but if you’re not strategic with your spending, then you might not be maximizing those rewards. Take an hour to really understand your credit card perks this year. Then make note of where and when you should use each card. If you get 4 percent cash back at restaurants with your Capital One Savor Credit Card, then be sure to only use that card when dining out. If you earn 5 percent cash back at Amazon and Whole Foods with your Amazon Prime Rewards Visa Signature Card, then always use that one card at these two spots. With a little bit of strategy, you’ll be earning more cash back, points or miles than ever before.
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