Just about everyone hopes to do a better job managing their money in the New Year, but unless you have well planned strategies that change the way you spend money, this is hard to accomplish. Since many people will not see pay raises or bonuses this year, it’s likely that you’re not able to depend on a greater cash flow. What you can do is begin taking smart and strategic steps to save more of the money that you do make.
Streamline Cash Accounts
If you have a “cash account” but know that you want this money to ultimately end up in a retirement plan, you may want to think about keeping it in a Roth IRA. The great thing about a Roth IRA is that your contributions can be taken out without penalty, even if you’ve not reached the 59 ½ age restriction. Keep in mind, any of the earnings will have penalties, but the money YOU put in can be accessed at any time. If you don’t need to get at the funds, then the money remains part of your retirement savings!
Monitor Your Investments
Do you know where your investments are and how they are invested? Many investors don’t, and they instead use automatic enrollment and autopilot settings. While this approach may be low maintenance, it means that your money may be invested too aggressively or too conservatively. This year, look at your investments each quarter and make sure that the investment approach suits your particular circumstances.
Review Current Services
It’s easy to get comfortable writing out a check every month to the same cable provider or car insurance company, but many companies offer their best rates to new customers. Shop around and see what types of deals you can get with a new service. If you’re not comfortable switching, use this information to negotiate a better deal with your current service provider. You have nothing to lose, and money to gain.
Also, when reviewing services, eliminate packages or downgrade services for the things you don’t use, such as high-priced cell phone minutes or premium cable packages.
Respect the ATM/Debit Card
In today’s “instant gratification” society, we are so inclined to making impulse purchases without thinking twice. But these purchases can really add up, so be careful. While you may not want to “shred” your ATM card or leave it at home, give consideration to giving yourself a weekly allowance for what you want to spend on cash-based purchases and use your cards for emergencies only. This way you can plan for lunches out or a coffee “treat” and think before you just spend, spend, spend! This approach will help you stay on track with your financial goals and force you to think twice about many of the unnecessary purchases that drain your account each month.