Savings Tips

Financial experts weigh in on unlocking success in the New Year

By Christina Fuoco-Karasinski

Resetting financial goals is a common resolution for a New Year. Is 2020 the year to get out of debt, buy a house, plan that once-in-a-lifetime trip, or just build up a rainy-day fund? Most people know the importance of saving, but some may find it challenging to know where to start or how to create a savings plan to achieve these goals.

“The New Year is a perfect time to kick-start a savings plan to help reach financial goals,” says Bryce Lloyd, FirstBank’s Phoenix Market president. “Folks typically find that by creating a savings plan early, it can help achieve other resolutions. For instance, dining out less can positively impact one’s wallet and waistline, translating to both health and financial goals.

“When creating a savings plan, it’s important to keep the 50/20/30 rule in mind, which suggests putting 50% of income toward necessities, 20% toward paying off debt or for savings, and 30% for ‘fun’ money.”

In addition to appropriately allocating income, there are several other tips and tricks to consider in reaching 2020 savings goals:

1. Avoid peak season for big purchases: Try to time purchases during the off-season. This can mean buying a winter coat in April when it goes on sale, visiting Italy in November, or maybe even starting Christmas shopping in July.

2. Review automatic subscriptions and payments: Look at recurring or automatically enrolled payments, and cut any streaming services, gym memberships, or delivery plans you don’t use. It also wouldn’t hurt to nix a few you do use, but don’t need.

3. Review the small purchases: Those daily latte purchases can add up to be more than $1,100 a year. Consider cutting back on nonessential, expensive food and drinks. Instead, commit to making coffee at home or packing lunch.

4. Pay down high-interest credit cards: Whenever possible, pay more than the monthly minimum balance, focusing first on the cards with the highest interest. Once these payments are back on track, resist adding to the balance going forward. Some cards also offer balance transfers at lower interest rates but be wary of sneaky fees.

5. Be economical when eating out: When going out to eat, try to limit the items ordered to just an entrée, and steer clear of buying multiple drinks or appetizers. This strategy will not only save money but cut down on caloric intake as well.

6. Consider disputing your property assessment: Studies have found county assessors can over assess the value of a home, increasing the amount owed on taxes each year. If you think the home value wasn’t properly assessed, consider petitioning the town’s tax assessor for a revaluation.

7. Refinance your mortgage: Interest rates are still relatively low, so consider refinancing your mortgage before interest rates continue to rise even further. Just make sure to factor in any accompanying fees and expenses could accumulate with a refinance transaction.

“The best time to start saving is now, so let the new decade be the launch of productive behaviors,” Lloyd says. “Making simple changes can help form long-lasting habits that ultimately lead to a balanced budget and achieving broader goals.”

© 2018 85085 Magazine. A Division of Strickbine Publishing Inc.

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