‘Tis the season to be saving

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The end of the year is just around the corner, which means New Year’s resolutions are on the top of everybody’s minds. Finances stick with us every day whether you’re struggling with debt or saving your way to retirement, so it’s no surprise that spending less and saving more are common goals for the year.

But, as with all New Year’s resolutions, it’s important to stick with the plan and follow it through beyond January 1 – especially with all of those tempting sales coming up. Here are some easy tips to keep up with your saving for 2020:

What are you saving towards? Having a plan in mind helps you to remind yourself why you’re saving in the first place. It could be new car, a two-week holiday somewhere exotic, or perhaps a down payment on a house. The vague goal of “save some money and spend less” isn’t enough and will ensure you stumble on the way to saving. Make sure you write down your goals and periodically check them to keep the good habits up and remind you why you’re saving.

Budget, budget, budget. Budgets are essential because they give you a bird’s eye view of what your incomings and outgoings are. Using a budget lets you know if you can splurge on that extra meal out or buy yourself that special gift you’ve been eyeing up. Without a budget, expenses tend to muddle up together and disappear into a black hole before you know where your money went.

Luckily, there are more ways than ever to create and manage a budget. Whether it be as simple as pen and paper or a spreadsheet, to using an online service or an app, such as Mint or MoneyLover. The New Year gives you the perfect time to turn over a fresh leaf and start your budget with an eye to securing your financial future.

High-interest debt, often credit cards, will rapidly eat into your savings. Often the best financial decision you can make is to avoid saving, beyond a small emergency fund, and instead tackle high-interest debt. For example, if you have credit card debt charging you around 15 percent, you’d be better off paying the debt off than trying to save your money. Finding savings accounts that offer over 1 percent interest can be challenging, meaning that your money would be better spent paying off your debt and saving on interest rate charges in the long term.

We all forget, so why not make the process easier. Ask your bank to automatically transfer a percentage of your salary every month into a separate account that you have earmarked for savings. Using this technique will get you in the habit of not spending your money before you remembered to save it, and removes any excuses you have for forgetting.

We live in an age of subscriptions. A lot of our entertainment consumption, for instance, revolves around services like Spotify, Netflix or Amazon Prime. These, along with various cloud services, office applications, and photo-editing tools, can quickly rack up to a significant monthly expense. Examine each of your subscriptions with a critical eye and cancel or consider free alternatives. One example might be replacing Microsoft’s Office 365 with an open source alternative such as Apache OpenOffice.

And don’t forget that classic unused subscription – the gym membership! Research has shown the gym membership to be one of the most ubiquitous unused subscriptions weighing on people’s bank accounts – indeed the gym business model relies on people paying but not attending. Make sure you are using a membership you do have, be honest and cancel those you don’t, and consider outdoor activities instead – especially during the cooler winter months.

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