Whether you are saving toward a goal on the horizon or years down the road, right now is the best time to start a savings plan. Working with your household budget in mind, start a savings plan by mapping out your current expenses and finding opportunities to put money into savings each month. The most important thing to remember as you start your savings plan is that starting small is better than not starting at all. Reaching your goals starts with a single step.
A great first step toward reaching your savings goals is to set up automatic payments. Not only can automatic payments save the time you’d otherwise spend poring over bill pay each month, it can also help you stick to your savings plan, and even get ahead. Just as you can set up automatic payments for your bills, you can set up automatic transfers from checking to savings. For the months where your expenses stay pretty much the same, you can sit back and relax as you build up your savings. In the months when you’ve spent less than expected, earned a bonus at work or received gifts from family, use these opportunities to get ahead in your savings. By transferring this cash as soon as it comes in, you don’t give yourself enough time to miss it.
While it’s a smart idea to automate your bill pay and savings, too often we also put our spending on cruise control. Losing track of what you spend on a regular basis can be the obstacle keeping you from reaching your savings goals. At the start of the New Year, begin tracking your personal cash flow to see what you’re spending on a daily, weekly and monthly basis and cut out any expenses that are not needed. This fresh start on January 1st will help you set a great pace toward reaching your savings goals.
The coming year can also be your time for starting a retirement savings plan or getting ahead in the plan you already have in place. No matter how much time stands between you and retirement, it’s never too late or too early to start saving. If you’re not already enrolled in your employer 401k plan, make sure you sign up as soon as possible and contribute at least the employer match. As soon as you’re able, increase to the maximum 401k contribution limit, which in 2019 will be $19,000. Ensure that you’ll continue enjoying the good life for a good long time by preparing for the unexpected and remaining flexible.
Looking for new ways to earn and save money? Consider additional sources of income such as becoming a landlord. Purchasing property can be a great way to diversify your investment portfolio. Finding tenants to rent your property residentially, commercially or for vacation can help you pay the mortgage and generate additional income to put away into savings. Other sources of income may include freelance work or a side business, turning a passion or hobby you enjoy into earnings that will help you pave your way to reaching your savings goals.
Keeping your savings goals on track also means being ready for unexpected expenses or special opportunities. A rainy day fund will help you handle whatever comes your way with savings outside of your main checking and savings accounts. Keeping this rainy day fund separate can help you avoid spending it on a whim, and it also enables you to save on your own terms.
Make 2019 your year to get ahead in your savings goals. Follow this checklist to set yourself up for success in the coming year, then come in and see us for your complimentary goal planning session.