Posted on January 7, 2016 in Saving Money
6 Easy Ways to Save Money in 2016
After a month of exorbitant sugar consumption and excessive spending, January offers a clean slate for more than just eating habits. With a bank account that’s begging to be replenished, why not shape up your savings along with your health in the new year?
For most people, thinking of creative ways to save money isn’t usually top of mind. According to a December survey from GOBankingRates.com, more than 62% of Americans have less than $1,000 in their savings account—and 21% don’t even have a savings account.
Those numbers mirror results from another survey by Bankrate.com that showed 62% of Americans have no emergency savings for incidentals like an emergency room visit or much-needed car repair. If you don’t have cash-on-hand for these unexpected expenses, you may be forced to take on debt – which makes it even harder to build your savings.
Is 2016 the year you’ll break the no-savings cycle? A new year is a great time to start new habits – here are six easy and effective ways to save money in the coming months.
1.Monitor your spending
When it comes to saving, the best place to start is with—you guessed it—spending. Since a penny saved is a penny earned, you’ll want to start by reviewing your spending habits to see where you can cut back. Is dining out consuming a larger portion of your income than you’d like? Are those daily lattes adding up to a shockingly significant amount?
Reviewing your spending habits can be as manual as picking through old bank and credit card statements, or you can make it easy on yourself by signing up for an online budgeting app. These tools connect to your various accounts and allow you to categorize expenses, so that over time you can start to recognize spending patterns and see where you might want to make changes.
2. Make a budget
As you familiarize yourself with your spending habits, it’s also key to make strategic decisions about where you actually need and want to spend your money – that’s where a budget comes in handy. Start by making a list of monthly non-negotiable expenses (rent, utilities, groceries, debt payments, etc.), adding your monthly savings goals, then tacking on extras like eating out, live music and yoga retreats.
If your income doesn’t cover your ideal budget, it’s time to start trimming some of the fun stuff. As much as that sounds like a bummer, remember you can add it back later when your debts are paid and your savings is stocked.
3. Set savings goals
Saving money for the sake of saving money is a pretty un-motivating strategy, so it helps to stop and think about what that money can really do for you. An emergency fund provides peace of mind, while saving for a dream trip or a down payment on your first home can be an exhilarating prospect. Figure out what’s important to you, then set your savings goals to match.
To keep those savings goals front and center, you can use a financial app like Dobot (get on the list for early access). Not only does Dobot help you identify ways to save money by analyzing your income and spending, it also lets you assign savings to multiple goals. Instead of funding a generic “savings account”, you can fund the things you really care about and visualize your progress toward meeting those goals.
4. Look for better deals
It’s worth checking into different options every year for car, home, health and other insurance policies. Companies that bundle auto and homeowners insurance often offer discounts, and online tools allow instant comparisons for auto insurance quotes and homeowners insurance.
Similarly, if you have credit card, student loan or mortgage debt, it may be an opportune time to refinance those loans at a lower interest rate – which can save you a significant amount on interest over time. Just remember to put that savings towards your savings goals, rather than blow it on something you won’t even remember by the time 2017 rolls around.
5. Set up automatic transfers
One of the easiest ways to save money is to make it a no-brainer. Figure out where you want your money to go, then set up automatic transfers so it happens regularly. Most financial institutions offer automatic transfer options from your checking to your savings account, or you can use an app like Dobot, which moves small amounts of money from your checking account to your Dobot savings account on a regular basis. Before you know it, your savings goals will start to become a reality – no effort required.
6. Embrace the coupon
Spending money on certain things is a necessity, but that doesn’t mean you need to accept the sticker price of everything you buy. The art of saving money on small things has become more popular in recent years, thanks in part to sites like Groupon and coupon apps like RetailMeNot. Finding great deals on the stuff you need (and, let’s face it, sometimes just want) can actually be an enjoyable part of your budgeting journey.
Because saving money is important, but scoring a half-price massage can be imperative.