You got to love my husband. He just recently set up a couple of extra savings plan accounts for the new year. Into these accounts, money that is left over at the end of the month accumulates. It not only gives us savings, but serves as a real challenge. How much money can we put into it each month, and can we beat the previous month’s “record?”
The New Year is a great time to start a savings plan if you don’t already have one or to revamp your existing savings plan. Your goals for this coming year may be different from the one that you left behind, you may have a different income or a different life situation.
The beginning of the year is a natural time for a clean financial slate, as well.
Some of the things that you should consider doing in your New Years Savings plan are:
Create emergency accounts
You should have at least three months of emergency savings available. This is money that you could live on for three months if you had no income coming in. If you can do it, six months or even a year is even better.
You might also want to keep a separate emergency account available that could be used for unexpected expenses that may arise, such as having to replace an appliance, make repairs to your home or car or pay medical bills.
Find a high-yield savings account
These days, you could actually lose money when you put it into savings. That is because interest doesn’t always keep up with inflation. Do your research and find high-yield savings accounts where your money can grow, or at least keep up.
Start or overhaul a monthly budget
If you don’t know where your money is going then it is hard to know where the holes are that can be patched, and it is easier to overspend. You should start with the monthly expenses that don’t change, such as your monthly rent or mortgage payment or insurance. Then add in other needed expenses, such as food or gas. Since these could fluctuate, create a number based on an average of what you pay over three months. Try to reduce these costs over time and save the extra.
Those three areas are a good place to start with your New Years Savings Plan.