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When December rolls around, people typically take their pens and paper and start scrawling down a long list of New Year’s resolutions. Often, those optimistic goals include “saving money.” While those plans are well-intended, by February, savings accounts are often stagnant and spending has skyrocketed.
So, how can you really up your savings game this year? Here are the top tips for saving in 2017.
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1. Set a savings goal
On New Year’s Day — once your headache from all that champagne subsides — set a savings goal for 2017. Your goal should be measurable, achievable, realistic and timely. You might feel really ambitious and set a super-high savings goal, but you’ll also be setting yourself up for failure.
When deciding on a savings goal, think of a specific purchase or benchmark you could realistically reach in 12 months. The goal should require self-discipline and a little sacrifice when it comes to spending (it is a goal after all), but you shouldn’t overreach.
Then, find a friend or family member who can hold you accountable, or write the goal down in a place where you’ll see it every day, like your planner.
2. Choose a savings account thoughtfully
Be picky about where you keep your savings. Savings accounts vary widely when it comes to interest, fees and minimum balances, so do your research and find the one that’s perfect for you. Take into consideration extra charges like monthly service and ATM fees.
While the interest rate might sound minimal at first, it adds up. And every little bit counts when you’re saving toward a specific goal. Check out online banks too; online savings accounts sometimes have higher interest rates.
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3. Make saving automatic
Chances are, you won’t have the self-discipline to set aside a portion of your paycheck every month for savings. So, make your savings contributions automatic. Banks often offer free services that will transfer a fixed amount of money from your checking to your savings account every month.
Or, ask your HR department if you can direct deposit a percentage of your paycheck every month into a savings account.
4. Establish an emergency fund
While your savings account might double as a rainy-day fund, if you’re super savvy about saving you’ll have a fund dedicated solely to emergencies. Your savings account might be for big purchases — like for a down payment on a house or car — but you should not touch the money in your emergency fund unless there’s an actual emergency. If you lose your job or have to go the hospital, you’ll have something to fall back on without having to sacrifice that big purchase you’ve been saving for.
Typically, you should have enough in your emergency fund to cover four to seven months’ worth of expenses. Experts recommend starting your fund with small goals — such as saving $1,000 — and then working your way up.
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5. Monitor your monthly expenses …
Start tracking your monthly expenses. For one month, track every single purchase down to the cent. You’ll know exactly where your paycheck is going and which areas you’re overspending on. You’ll feel more in control of your money, and it’s a key step toward forming a realistic budget that you can actually abide by.
You might realize, for example, that you’re spending an obscene amount on coffee every week. Once you’re aware of that, you can limit your coffee shop stops to three times a week, and put the rest of that money that you were spending on lattes into savings.
6. … then set a budget
Once you know what your spending habits are, you can draw up a realistic budget. Budgeting will ultimately help you save by helping you cut out frivolous spending. It might be a bit of a trial-and-error process at first; you have to figure out what works best for your lifestyle.
You don’t have to cut out all of the fun stuff, but you do need to pay your bills on time and eventually meet your savings goal. Budgeting will force you live within your means, which is essential to growing your savings.
7. Be smarter with shopping
When you go shopping, be savvier. Rack up the rewards by signing up for loyalty programs at your go-to stores, sign up for a warehouse club and buy in bulk, clip coupons when you can, and plan your shopping trips around sales and daily deals.
When shopping online, use the internet to your advantage and check out price-comparison websites to make sure you’re getting the best deal. Remember that just because something is advertised as being discounted, that doesn’t necessarily mean it’s a good deal.
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8. Take advantage of apps
Whether you want to order a car to come pick you up or just want to socialize with your friends, there’s an app for that. So why not use that technology to become a better saver?
There are apps out there to assist with budgeting, apps that will help you find the best local deals, and apps that let you sell your old junk to your neighbors. This year, find one or two apps that will help you save, and use them on a regular basis.
9. Consider a flexible spending account
Explore signing up for a flexible spending account where you work. FSAs are often offered by employers as a part of a benefits package, and they can save you money on health care costs not covered by insurance, including copays and deductibles.
After enrolling, you decide how much you want to contribute for the year. That amount is then deducted from your salary over time, before income tax. You withdraw money from the account to pay for certain eligible medical expenses, which are effectively discounted thanks to your tax savings. But you must use up all of the funds within your benefits year.
10. Check your progress … and reward yourself when you reach your goal!
In order to save effectively, you need to know exactly where you stand with your finances each week. Make a “money date” with yourself every Sunday and go through your transactions to ensure you’re on track with your budget. If you fall off track (maybe you spent too much one week or didn’t sock away a single penny from your paycheck), don’t give up! Get back on track.
When you hit savings goals, celebrate and reward yourself a bit! Saving is all about moderation, but not completely cutting out shopping and spending.
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