The end of the year can be a difficult time for many families when it comes to money. Christmas often means dipping into our savings and abandoning budgets, to treat our family and friends.
But as the countdown to the new year begins and you start to look forward to the next 12 months, it can be the perfect time to reflect on your money and set some New Year’s financial resolutions for the year to come.
One of the best promises you can make this holiday season is to save money in the upcoming year – through budgeting, cutbacks and smarter shopping. By setting sensible, achievable goals, you can finish next year feeling confident and in control of your money.
Start your year with a bang with our top five money saving New Year’s resolutions.
1. Look through last year’s spending
The end of the year is a great time to look back on what you spent last year and see where you could potentially save for the year to come.
If you have a bank account, you can print out or ask for an annual statement. This will give you a rundown of all the purchases you made over the last 12 months.
We recommend grabbing a set of colored highlighters and marking off payments which were essential in one color, and any unnecessary purchases in another. Then look back and see what time of year or month you spent the most money.
Similarly, if you have credit cards, you can ask to see your Year End Summary. This will show all your purchases, plus any cash advances or balance transfers.
If not, start jotting down any recurring or big expenses from the past 12 months. This is also a great opportunity to look through your running subscriptions and memberships, to see if there’s any you can cancel to keep costs down.
2. Create a budget for the year
Being organized with your money from the start of the year will help you plan your finances better. Setting up a budget is simple enough to do, and makes it easy to see where your money goes each month and where you could maybe cut back.
Your budget doesn’t need to be a complicated spreadsheet either. Just a list of your income and expenses will give you a clear picture of what you can save each month.
Here’s a quick guide to planning your New Year’s saving plan:
- Tally up your total income after tax. Work out what you earn every year, including any extra income sources, such as child support or interest.
- Calculate your expenses. Include all your monthly expenses. This includes bills like your rent payments and electric payments, to groceries and subscription services.
- Plan the big-ticket payments. If you’ve got a vacation planned or are looking to move next year, think about how these large expenses will affect your budget.
- Set a goal. Be realistic and think about what you want to achieve. This could be to reach a savings goal or pay off your credit card debt.
- Create an action. With a goal in mind, your income and expenses laid out, figure out what you need to save each month in order to reach it.
- Track your progress. Keep a record of what you manage to save each month, along with any other costs you hadn’t planned on. The good thing about a budget plan, is you can easily change it if your situation changes as you go along.
If you don’t know where to start, there are lots of budgeting plans available online, such as this
If you feel your savings slipping, check out our article on how to get your budget back on track.
3. Start an emergency fund
The new year is a great time to start a rainy day fund for when you most need it. This could be anything from your car breaking down to an unexpected trip to the hospital.
Set yourself a goal of how much you want to save and start small, slowly building up your savings over time. If you’ve struggled with saving in the past, start off setting aside just $10 a week and keep adding to it each week when you have the money spare.
At first it may not seem like much, but it’s good for getting you into the habit of putting money away in savings.
Keep these funds in a safe place but separate from your daily expenses, so you won’t be tempted to go on a spending spree with them. An emergency fund should be only used on those unexpected costs – a savings account is better suited to reaching your goals, like paying for a vacation.
If you have credit card debt, it may be best to focus your extra income on that, before building up your savings.
4. Limit those small luxuries
One of the best ways to save money is cutting back on your nonessential purchases. This doesn’t have to mean giving up something big for the New Year. Instead, just try to limit the amount you spend on unnecessary luxuries.
If you’re prone to grabbing a coffee on your way to work each week, reduce it to a monthly treat. Instead of splurging on another new outfit, look for a nearby clothes swap store or event and trade your old clothing for something new, without it costing a cent.
Cooking from home instead of relying on carryout and restaurants is also a great way to save money and brush up on your cooking skills. Likewise, instead of paying monthly for a gym membership, start jogging around your local area to burn off calories or do home workouts with free online videos or apps.
You could also introduce a no-spend day once a month. This is a day where no money leaves your account (or hand), so you’ll need to use what is already in your cupboards for meals or browse your DVD collection for movie night.
5. Take advantage of reward schemes
America is a consumer paradise, meaning for every brand that pops up, several more are competing against it. This makes it easy to find better deals and discounts on your purchases by shopping around or signing up to a loyalty program.
Reward schemes give back to you for sticking with that brand, usually by offering you a range of discounts, offers and incentives – from coupon books to cashback. These can be offered for a range of expenses from groceries to car repairs and clothing.
An easy way to save money is to compare before you buy. While it would be nearly impossible to check the price of each grocery item you purchase at every store, it’s handy to do if you’re making a bigger purchase, such as a new TV or furniture.
This allows you to find the lowest prices. In some cases, brands may match that price or make theirs cheaper just to beat a competitor.
At the Kroger Family of Stores, you can take out a Shopper’s Card to benefit from everyday discounts and digital coupons, each time you use our Money Services desk or buy your groceries. Find out how to get the most from your shoppers card.