Saving money can be difficult at any stage of your life. But as you age, saving for the future becomes crucial, especially as you get closer to retirement or you simply want to embark on a new journey. This year, instead of making a resolution to “save more money,” outline specifically how you want to accomplish saving more money. Commit to saving 5% more from each paycheck, or increase your retirement savings contributions from 6% of your salary to 10%, as one option.
Whether you are good with budgets or not, you must get a clear idea of your spending habits, too. Smaller changes in your lifestyle, like lowering the thermostat on your water heater, stop smoking, downsizing to a smaller home, going car-less if there’s low-cost public transportation where you live, cut unnecessary monthly subscriptions and service fees or eating at home rather than dining out three or four times a week will help.
CrunchyTales consulted with the Canadian financial expert, Jennifer Thompson, to find out the top things you can easily do going forward to start your year off right.
Know where your money is going
Look at your last 3 to 6 months of credit card or bank statements. Notice any patterns? Compulsive shopping during your lunch breaks? Are you aware of where your money is going? Are they going to what you value and what your listed goals are? Some people keep to budgets better than others. Budgeting apps or personal finance software can help you find savings in your everyday spending. Download a financial tracking app such as Digit to help you keep track of where your money is going. Digit analyzes your spending and automatically saves the perfect amount every day, so you don’t have to think about it.
Know how much you want to spend before you spend
Budgeting does not work for everyone but being clear about how much you want to spend before you shop is a step towards reducing compulsive shopping. Do your research. Decide before going out, how much you want to spend and keep to it. If you see something you want, give it a day or so to decide if you still want it. You’ll be surprised how much you can save by shopping at the competition.
Set Financial Planning goals based on a timeline
Set some financial goals: 3, 5 and 10-year goals. Down payment on a cottage? Children’s education fund? Estimate what each goal will cost you. Be as specific as you can. If it’s a long-term goal like retirement, stipulate the income you’d like for yourself in your retirement years.
Start a savings and investment plan
Yes, pay yourself first. See it as part of your self-care for 2020. Have your financial institution automatically withdraw a portion of your income and transfer it to a savings account for contingencies. Like the savings plan, an investment plan can also be automated. An investment plan is to fund your financial goals.
Regularly go through your wardrobe
Switching things around is much cheaper than buying new clothes. Sell what you don’t wear on online marketplaces such as eBay or use websites such as MusicMagpie and Zapper to turn unwanted goods into cash, or swap your garments with friends. Make it a point to do this at least twice a year.
Evaluate your financial plan from a holistic perspective
Financial planning is more than just budgeting. It includes planning your legacy, managing your debt and protecting from job loss due to death and disability. Regularly review your financial state to keep it aligned with your changing priorities.
Work with a financial planner
This will help keep you on track. A financial advisor who knows what you value and understands your goals can help you achieve a healthy relationship with money.
Want to see more success in 2020?
Start by getting your financial house in order!
Jennifer Thompson is a Speaker, Consultant, and Writer. She has worked in various areas of banking and finance for twenty years. By marrying esoteric ideas of money with the nuts and bolts of investing, she helps women through one on one coaching and seminars to navigate the world of finance with the purpose of enjoying life and abundance in every sense of the word.