When it comes to making New Year’s resolutions, there seems to be two goals everyone tries to commit to: get in shape and save money.
While our professional accountants at Liu & Associates may not be able to help you tone up your beach body, we can definitely address the goal of saving money.
The idea is to start small and to not overwhelm yourself with financial goals. Consider the following 8 resolutions you can try this year to begin saving money and brightening your financial future:
1. Create a Budget
The best way to keep your spending and saving on track is to create a budget.
Budgets don’t have to be elaborate plans that are difficult to follow.
Begin By tracking your spending for a month or two to see where your money is going. Calculate your income and expenses. From there, adjust your spending habits to free up some saveable money.
2. Set Small Savings Goals
Saving money can be a daunting task – but most people think too big and bite off more than they can chew. When the savings plan isn’t working out, they tend to throw in the towel.
Start with smaller savings goals. You can even begin a savings challenge where you save $1 the first week and add a dollar each following week.
3. Start an Emergency Fund
Did you know that 75% of Canadians do not have any money set aside in case of an emergency?
Medical issues, loss of employment, household damage and car repairs can come out of nowhere. You want to avoid relying on credit or loans to deal with these issues.
For 2020, look into opening a TFSA. This is a tax free savings account available for Canadians over the age of 18. Although there are caps on how much you can place in the account per year, these accounts are flexible, great for emergency funds and withdrawals are tax free.
4. Consolidate Your Debts
If you carry multiple balances across different debts, you are likely paying varying interest rates.
To save money on interest payments, consider moving all of your debts to one place. You can apply for a line of credit, personal loan or credit card to cover all your debts.
5. Plan Trips and Vacations in Advance
The earlier you book a flight or hotel, the better rate you can receive. Try to plan your vacations and trips as early as possible.
This also gives you an opportunity to save money instead of making all of your purchases on a credit card and having to pay it all back later.
6. Switch Service Providers
There’s always a better deal out there – shop around for cable, internet and cell phone rates.
Most companies will offer you an introductory rate for signing up. Just be aware of the expiration dates of these deals and what you will expect to pay once the promotion ends.
Also consider bundling services to save money each month.
7. Create Meal Plans
Meal planning is a great way to cut down on your grocery bills and avoid the temptation to eat out.
(And, if you’re looking to get in shape, it can help with that too!)
To create a meal plan, simply decide what meals you are going to prepare for your family for the week, taking into consideration any leftovers that can be used again or served as lunch. Make your grocery list in accordance with your plan and stick with it.
8. Learn About Money
This could be the year for you to improve your financial literacy. Take time to learn more about money management, budgeting, investing and paying off debts.
If you have any questions about making changes to your personal finances, or learning more about financial literacy, feel free to contact us at Liu & Associates for more information!