7 Principles for a Strong New Years Savings Plan

7 Principles for a Strong New Years Savings Plan

Congratulations– you made it. It’s January. Life is fresh, the year is new, and now that shopping season is behind you, at least for the next few seasons, you can instead prioritize on the new year ahead. Take the time to articulate what you are grateful for. Spend the next few weeks actively reflecting on how you can lead a better life. And adopt these sound financial principles into your New Years savings plan to make sure you stay on top of your finances in the year to come.

Always open your mail, and pay off your bills on time

You might be surprised how many people decide to ignore bills and invoices, only to watch them stack up and double in the months to come. Although it might seem acceptable to simply not open an invoice marked to you, you are still responsible for paying it off. Instead of procrastinating, take action and open your mail as soon as possible! If you owe money for services or for medical help, pay it off as soon as possible. If this means pulling out your card or writing a check as soon as you see the invoice, do it! It is impossible to stay on top if you are in debt. Pay it off immediately, and next year, you’ll be thankful you did!

Avoid impulse purchases

We are all victim to it, at one time or another. We’re saving up money, doing just fine. Suddenly, we are introduced to some new product, some new thing that we had no idea existed, or previously did not care about. Now, we cannot live without it. Such types of impulse purchases are disastrous to any New Years savings plan. Although we have been trained by advertisements to need products, it is important to recognize that we do not necessarily need any consumer good. Instead of purchasing an item on an impulse decision, why not set the item down and spend two weeks deciding if it is essential to our lives. Chances are, by the end of the two weeks, you’ll have forgotten about the item entirely.

Avoid buying food and drinks out.

Following the principle of avoiding impulse purchases, it is also wise to stop purchasing things you simply do not need. Take for example, a cup of coffee. An ordinary cup of coffee costs about four dollars. This might not seem like much given the energy it gives you. However, if you were to purchase a cup every workday, this would come out to $20 per week. Multiply this by 50 weeks, and you are spending $1,000 per year on coffee alone. Instead of blowing away your money, instead invest in a simple coffee maker, and premium beans, and you’ll be saving hundreds of dollars per year that you can instead add to your savings. This also applies to eating out. Instead of spending $10 per lunch every workday, which would come out to $2500 per year, pack your own meal!

Start an emergency fund.

A recent poll has shown a record 29% of Americans reported having no emergency savings. Likewise, only 22% reported having enough savings to last six months of expenses. Although six months would be nice, it is essential to begin saving up as much as you can to have some savings to fall back on. You never know what type of medical operation, car repair, or house improvement might be necessary. Even having a few weeks saved up can help you and your family greatly and drastically reduce stress in your lives. Set a small goal of even stashing a few dollars away every paycheck The more you begin to save up, the calmer you will be. Likewise, you will gain financial stability in the process.

Use cash

If you have recently had problems paying off credit card bills, go easy on you and instead start using cash. This way, you cannot be surprised by how much you are saving, nothing will have to be paid off—or carried over—at the end of the month, and you won’t incur any debt as a result. Even the physical act of having to get cash out of an ATM reminds you to be wise with your spending. Most likely, you will discover when having to use cash, you will end up spending less.

Stay positive

No, it’s not a joke. By staying positive and thinking optimistically, you will encourage yourself to make smart decisions and start saving money. Of course, you should always be realistic when it comes to finances. This being said, you should nonetheless strive towards improving your current condition, financially and otherwise. By not giving up hope that you someday will be in total control of your finances, you will make great strides in the upcoming year to saving up and achieving long-lasting financial stability.

Happy New Year!

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