New Year, New Financial Life – Resolution: Save Money

Jan 9, 2015 | Budgeting, Financial Health, Goal-setting, inspiration

So you’re bringing a “New Year, new you” mindset to your financial life. Your first resolution: save money. That’s a great start, but maybe you’re wondering what’s next, or exactly how to go about it. Here’s how to make sure that your resolution really sticks.

Tie your intention to a clear and specific goal

Instead of just telling yourself, “I need to save more money,” tie it to a specific goal: “I will build my emergency fund of six months’ worth of expenses,” or “I will fully fund my Roth IRA.” If you can’t name it, you can’t do it! Really bring to life what it is that you’re working toward. It will help you stay engaged and motivated, and it will make the process a lot more fun.

Make a road map

Now that you have a clear idea of what you want to accomplish, you can break this down into smaller, mini-goals that will get you there. Do what works for you. The right financial plan is the one you’ll actually want to stick with! A few ideas to get you started:

  • Set aside a specific portion of your paycheck. Decide what percentage you will devote to your savings goal, and set up an auto-transfer so that this money goes into your savings as soon as your paycheck hits your account.
  • Think about starting a side hustle, and save all of that extra income.
  • Can you cut back on spending? In what specific ways? Maybe it’s bringing your lunch to work rather than eating out, or taking transit a few times a week to save on gas. Make it a game and challenge yourself to bring a scrappy, resourceful mindset to everything you do.
  • If your target savings amount seems steep right now, try a progressive savings plan: rather than breaking down your savings goal into equal amounts to come out of each paycheck, try taking it week by week. Start with a lower amount, build your success, and raise the amount you save each week until you’re on track for your goal. Chances are, you’ll find it easier and easier to save more as you put new healthy money habits in place.

Kick-start your progress

You’re building a new, brighter financial future, and that is something to feel fantastic about. Celebrate the occasion by kick-starting your progress. The financial detox is a powerful one that, done properly, will last far longer than any juice fad. Or, it can be as simple as making a deposit into your savings to build momentum. You can also try the all-cash diet: don’t pay for anything with plastic. Just withdraw the amount you need for the week, and once it’s gone, it’s gone. This gives a much clearer sense of when, where, and how you spend. Use the all-cash diet for a few weeks to help reset your financial habits, or make it part of your lifestyle.

The important thing is that you’re using this brief kick-start to make a long-term shift. In the long run, focusing on budgeting and penny-pinching is not the way to think about saving. Think of it as paying your future self. Remember that every step you take to improve your financial health today will pay off, literally, for years to come.

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