We keep making new year’s resolutions. No matter how much we joke about how little those resolutions stick, we can’t help thinking about ways to improve our lives.
Our wishes are endless (join a gym, make a meal plan, pick up a new hobby, travel more) and, for most of us, it is easy coming up with resolutions. However, we do get stuck when making workable plans that we can carry beyond January. For the most part, our new year’s resolutions will probably require a bit of money, so let’s begin this new year with the goal of increasing our savings.
The best way to follow through with your plans is to know exactly what drives them. There are many reasons to begin your financial journey toward saving money. Whether your goal is to travel, become a homeowner, guarantee your kids’ education, or simply set your mind at ease by having savings, knowing exactly why you are doing this will help you commit. Make sure you have your financial goals written down so you can revise them often and keep motivated.
Tip #1 is all about intentional living. However, when we look at our expenses, we realize that we are rarely mindful of how we spend our money. To save money, you need to know where it is going in the first place. Keep track of your expenses for at least two months. There are apps you can use to figure out your spending habits. Although this might seem burdensome, there is no way around this step.
This step should be titled “Create a budget, but most people loathe doing this. However, as with Step #2, you cannot skip this. Instead of viewing budgeting as a form of constraint, consider it part of intentional living. By doing so, you are deciding where your money should go according to your wishes. The best way to tackle this step is to go from income to needs to wants. Your budget should always include your saving goals because it is a crucial part of your “spending” once you have decided to go on a journey to improve your finances.
After you’ve jotted down your expenses for a while, you should know whether you are living within your means. If there is an imbalance between what you make and how much you spend, you can either find new income, spend less, or do both.
Small expenses are usually the most problematic when making a budget and reaching your saving goals. Look at $1 purchases because those are tricky as we tend to justify those small buys. You will probably understand how significant these small leaks in your budget are when you track your spending habits. Whenever we need to spend big, we make plans; in contrast, when spending just a few dollars here and there, we rarely think twice.
As with every New Year’s resolution, be realistic. Do not expect to go from 0 to 100 in the first month. Set attainable goals that allow you to develop fully, not only financially, but in every aspect you want to prioritize in your life. It all goes back to Step #1; if you know why you aim to save and plan smart, your financial journey will not become a burden.
Many things you enjoy doing might cost significantly less or even be free if you are willing to put in some time researching. If you love going out, subscribe to local newsletters and look for free cultural events in your area. Always ask around to know if there is any free alternative for something you need.
One of the biggest struggles in your financial journey might be the impact your budget can have on your social life. Surrounding yourself with like-minded people who understand your financial goals might help. Alternatively, you can take on the role of the party planner, coming up with plans that allow you to stick to your budget and keep your relationships intact.
Be on the lookout for other people’s expendables. Stop by garage sales or sign up for neighborhood newsletters and social media groups that prioritize recycling and reusing. Also, consider looking for discount gift cards: Someone might not have any use for a bookstore gift card, while you might need one for school supplies.
Make slight changes in your lifestyle instead of focusing solely on changing your budget. Your spending habits will only be sustainable if they fit your needs and wants.