Was your New Year’s resolution to save more? We are now halfway through the year – how are you doing?
Creating and sticking to a budget, paying down debt, saving more and boosting income are all potentially impactful financial resolutions. Whether you want to build an emergency fund, or save for your next big purchase, try these strategies to help set yourself up for success.
1. Review your latest statements
One of the best ways to get an understanding of your spending is to review where your money is going. Look back through the previous three months of credit card and bank statements. Take note of categories where you’re spending more than you expected.
2. Cut out unnecessary monthly charges
Often people sign up for things that automatically renew — subscriptions, website memberships, etc. — that they might not use or revisit. While reviewing your statements, look for services you’re paying for but not utilizing. Even if it’s only $15 a month, you’ll save nearly $200 a year by canceling just one subscription.
3. Keep your eye on the prize and set saving and budgeting goals
It’s hard to focus on building your savings when you don’t know what you’re saving toward. Write down your short-term and long-term savings goals. Are you saving for retirement, for an emergency fund, and your dream DIY project? Once you know what’s on your list, it can motivate you to make the changes necessary to make it happen.
For help getting started with your list, try taking the Financial Wellness Assessment within your online account. Login through abaretirement.com and navigate to the Financial Wellness tab to begin.
4. Update your budget to keep it aligned with your goals
After reviewing your statements and identifying your savings goals, it’s time to create or update your budget with any changes to your circumstances, income, or recurring bills. This can help set you up for saving success.
Log in to your online account through abaretirement.com and navigate to Accounts > View Budgets to review or update the budget(s) you have in place. If you haven’t set up a budget yet, you can select Add Account, follow the prompts to add in your outside accounts (checking, savings, credit card, 529, etc.), and then select Create a Budget under the Accounts tab.
5. Make savings automatic
One of the best savings strategies takes a page from the retirement account playbook — if you have money automatically transferred from your checking account to your savings account on paydays, you are less likely to miss it. Set up a bi-weekly or monthly transfer to an interest-earning savings account to fund your short-term and long-term savings goals. You may be living paycheck to paycheck, but even if you set aside very small amounts – it will grow over time if you do not touch it.
6. Use financial technology
Piggy banks are no longer the only staple savings method. There are many financial apps available that may help you spend less and put more money away. Some apps will round your purchases to the nearest dollar and put the difference in an account for you, while others analyze your spending and help you identify areas where you can cut back.
You can receive personalized insights on your spending and saving within your online account homepage when you login through abaretirement.com. Simply select Add Account and follow the prompts to add in your outside savings and spending accounts. Once you’re done, you’ll see your custom analysis within the Insights and Transactions tabs.
7. Consolidate your debt
If you’re carrying debt at high-interest rates — credit cards, for instance — consider transferring the balances to a credit card with a 0% interest rate for 12 months or more. Even if you can’t get your balance to zero within that time, you’ll make more headway without the interest slowing you down so long as you don’t incur new balances on your high-interest rate cards.
8. Save a raise
Is there a pay bump or bonus in your future? Consider putting at least half of it toward building savings. If you get a pay bump, increase your retirement account contribution by a couple of percentage points. If you get a bonus, take half of it, and transfer it to an interest-earning savings account. Pay yourself first, so you’re not tempted to spend it.
9. Shop around for insurance
Ask around for new quotes for your auto or home insurance — you might be able to save a lot. One NerdWallet1 analysis found that good drivers could be missing out on more than $400 in savings every year by not shopping around for car insurance. (38% of Americans with car insurance hadn’t checked the price or shopped around in at least three years, at the time of the analysis.) Visit the big insurers online to see what you can get for your money or give a broker a call who can compare company prices for you.
10. Use your employer’s benefits opportunities
Do you have a flexible spending account (“FSA”) or health savings account (“HSA”)? Does your employer offer a dependent care flexible spending account, or commuter reimbursement? Wherever you’re able to pay for expenses with pre-tax money, use the opportunity to tighten up your bottom line and take advantage of tax-deferred opportunities.
With the right steps, you can set yourself on the path to saving more money this year. More conscious spending, targeted saving, and smart money moves will go a long way to improve your saving outcomes. For additional resources, visit the Participant Resources page of abaretirement.com.
1 https://www.nerdwallet.com/blog/insurance/state‐of‐driving/
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