If you’re like most people, there’s a good chance you’ll use the start of the new year as an opportunity to turn over a new leaf with respect to some important aspect of your life. Along with losing weight or getting back into shape, many people have the goals of spending less and saving more.
But like those other New Year’s resolutions, building up your savings is sometimes easier said than done. Simply wanting to save more is a start, but you’ll need more than good intentions in order to reach your goals.
While it can be difficult to adjust to a new savings habit, it’s worth developing the habit. By jump starting your savings in the new year you’ll improve your financial security for years to come. Here is some advice and ideas on how to jump starting your savings in 2012.
- Develop a Plan. Saving money is usually not something that happens without a plan (or at least it’s not something that happens very well without a plan). If you only think about saving money if you happen to find yourself with some extra cash at the end of the month, then you probably won’t end up saving much. You need to plan your savings strategy and make goals that you’ll hold yourself accountable to. For example, you can plan to save $100 every month, and do everything you can to try to meet that goal.
- Begin or Update Your Direct Deposit. If you don’t currently use direct deposit, start doing so in 2012. With direct deposit, you won’t have to hassle with cashing your paycheck or worrying about making sure you make the right deposits into your different savings and checking accounts. If you currently use direct deposit, take another look at where the funds go. Most direct deposit plans allow you to allocate different percentages of your paycheck to different accounts. Put 10% (or more) of each paycheck into your savings account, and the rest into your checking account.
- Open a New Account with an Online Bank. Online-only banks pay interest rates on savings accounts and certificates of deposit (CDs) that can be several times higher than you’ll receive at your local bank (or even at banks that have locations nationwide). Accessing your money from an online bank account is generally not much more difficult than from a local bank, so the increased interest you receive is likely to outweigh any minor inconveniences, particularly on large balances.
- Cut Back and Save. Another great way to jump start your savings is to find something in your current budget or spending habits to eliminate, and save the money that you would have spent, you’ll find that those savings can quickly add up. For example, if you cut back on just two $5 coffees per week, then over the course of the year you’ll have saved over $500, not to mention saving the time you would have spent driving to the coffee shop and the money you would have spent on gas.
Be sure to jump start your savings using the strategies outlined above.