What are your plans for 2016? As the year winds down, now is the time to consider not just what you want to accomplish in the New Year, but more importantly how you will accomplish it. If your goal involves a large financial undertaking – like going back to school, purchasing a car, or planning for a new family member – then follow our five tips to successfully save toward making your goal a reality.
Create a savings goal. Research how much you will need to put away so you have a specific dollar figure in mind to measure your progress.
Identify how much you can afford to save. Without making any lifestyle changes, determine how much is reasonable for you to put away each month. Make sure the figure is consistent from month to month, and that it doesn’t put any financial burden on other areas of your life.
Anticipate big annual expenses. If you know this is the year to replace your leaky roof or plan a family reunion vacation or pay for uninsured medical expenses, make note of when and how those expenses will impact your savings plan.
Identify habits that add up. Cutting costs starts with eliminating or reducing expensive habits. For example, save money each day by brewing coffee at home or reduce the number of times you eat out for lunch each week. Eliminating a $5 cup of coffee and a $15 lunch five days per week puts up to $5,200 back in your pocket.
- Sell unused items. That treadmill that’s collecting dust? Get rid of it. Big ticket items, and even a collection of much smaller ticket items, can give you cash flow quickly, with the added bonus of reducing unnecessary clutter in your home.
With your finances in order, achieving your goal will seem much more manageable. Maintain your motivation by attaching an action plan to your ambitions and seeing it through. If your goal is to head back to school, consider supplementing your savings with financial aid or asking your employer about tuition assistance.