New Year's Resolutions: Savings
Make This the Year of Financial Growth and Savings Success!
The start of a new year is the perfect time to commit to resolutions that build a brighter financial future. Make this the year that you focus on growing your savings and creating a strong financial safety net.
Build an Emergency Fund
Financial experts recommend having enough savings to cover three to six months of essential expenses. This emergency fund can be a lifesaver in unexpected situations like job loss, medical emergencies, or major car repairs. If that goal feels overwhelming, don’t worry—start small. Even setting aside $25 or $50 each paycheck can make a difference over time.
For example, saving $50 a month will add up to $600 by year’s end. The key is consistency and making saving a non-negotiable habit.
Use the 50-30-20 Budget
A simple, flexible framework for managing your finances is the 50-30-20 budget rule:
- 50% of your income for needs (rent, utilities, groceries, transportation).
- 30% for wants (dining out, entertainment, hobbies).
- 20% for savings and debt repayment (emergency funds, retirement, or paying off loans).
Customize these percentages to suit your unique lifestyle and financial situation. For instance, if debt repayment is a priority, you might allocate more than 20% to this category until progress is made. Tools like the CFPB Budget Worksheet can help you get started.
Set Realistic and Achievable Goals
The most successful resolutions are those that are specific, realistic, and measurable. Instead of resolving to "save more money," aim for something actionable like, “Save $1,000 for emergencies by the end of the year.” Break larger goals into smaller milestones, such as saving $250 every three months.
Automate Your Savings
Set it and forget it—take the guesswork out of saving by setting up automatic transfers. Easily set-up recurring transfers from your savings account to your checking account or link an external account for electronic transfers using Kleberg Bank online banking or the mobile app. You can also split your ACH paycheck deposit, so a portion goes directly into savings. The Federal Reserve recommends automating savings to establish financial discipline without the temptation to spend.
Track and Celebrate Progress
Monitoring your progress can keep you motivated. Use budgeting apps, a spreadsheet, or your bank’s online tools to see how your savings grow. Celebrate milestones along the way—small rewards for meeting goals can reinforce positive habits. Set-up an alert in Kleberg Bank online banking or the mobile app to notify you when you have reached a savings milestone!
Stay Flexible
Life is unpredictable, and your financial goals may need to adapt. If unexpected expenses arise, don’t be discouraged. Adjust your budget and savings plan accordingly and get back on track as soon as you are able.
Additional Tips for Success
- Emergency Savings Placement: Keep your emergency fund in a separate, easily accessible savings account to avoid the temptation to spend it.
- Cut Unnecessary Expenses: Review your bank statements to identify areas where you can cut back, like subscription services you rarely use.
- Boost Income: Consider picking up a side hustle or selling unused items to contribute more to savings.
Resources to Support Your Journey
Leverage free tools and resources to stay informed and motivated:
- MyMoney.gov: Provides resources on saving, budgeting, and managing money effectively.
- Consumer.gov: Offers practical advice on financial planning and making informed decisions.
Final Thoughts
Remember, saving is a journey, not a race. Even small, consistent efforts can lead to big results over time. By prioritizing your savings this year, you’re taking a crucial step toward financial security and peace of mind.
Here’s to a new year filled with financial growth, confidence, and success!