9 Smart Money Moves to Make in 2016
The end of every year opens the door to reflection and the promise of a fresh start. “Spend less, save more” is the third most popular New Year’s resolution (25% of us). Here are a few smart money tips to help you get control of your spending and avoid the typical holiday money hangover next holiday season.
Buy for Next Year
It’s hard to think about one holiday season when all you want to do is throw away the tree and tear down the lights. But force yourself to go out and buy for next December. There is no shortage of after-Christmas sales. Buy those 50% off LED or laser lights. Think about what someone didn’t get for Hanukkah and buy it for next year. Stock up on Christmas stocking stuffers, and buy the next size up for your kids.
Create a secondary checking account and auto-deposit a small amount into it each week. It’s a great way to save up for a goal, build an emergency fund or save for next holiday season. A little bit adds up: if you deposit $10 a week – five days’ worth of convenience store coffees – you’ll have more than $500 to spend in one year. You can also create a cash envelope where you stash a designated amount of bills each week. Set the amount and save consistently. Whatever you do, make sure it’s not easy to get to so you won’t be tempted.
Keep Track of Your Spending
Apps like Mint and Good Budget are just a few good ways to keep track of how much you are spending and saving. So is a plain old spreadsheet or ledger. No more excuses: write out your fixed expenses like mortgage and car payments; estimate the average power bills and food; and add up your credit card debt and even frivolous charges (don’t worry; everyone has them). Decide what you can cut down on, and be religious about setting your savings aside.
Vow to Start Couponing
While you’re out buying for next year, go to the office supply store and get discounts on a fat binder, some dividers and some clear baseball card-holder sheets. Clip coupons by category and tuck them in the card holders Vow to clear it out weekly. Simpler: punch holes in weekly circulars, tuck a pair of blunt scissors in the binder pocket, and take it to the store with you.
Get savvy with online and mobile shopping. Before you do any online shopping, go through a coupon portal like Savings.com to compare merchant prices and see what deals are out there at a given time. You will either be given a coupon code or it will activate an offer automatically at checkout. How easy is that? Tools like Favado and Price Jump are other good ways to compare prices.
Take Advantage of Rebates
Whether it’s an energy tax credit or a mail-in discount, promise yourself you’ll take advantage. It may not add up to much, but it will add up. Keep track of it!
Start Saving for Retirement
In the new year, make it a point to maximize your contribution to your 410(k), or contribute more to your traditional or Roth IRA. In fact, if you do it before the end of the year, you will mitigate your tax liability. You can contribute up to $5,500 to an IRA, or $6,500 if you’re 50 or older.
Set Up a College Fund
You’ve heard the college loan nightmares. Do something to avoid it. If you have children, you should start contributing to a 529 college savings plan, up to $14,000 a year. You can set one up for anyone, whether it’s your own child or not. Not only will you help your kid, you’ll also lower your tax liability and possibly get a tax refund.
Consider a Second Job
If you are not where you’d like to be financially, consider looking for another on a job site like Monster. Or take on a side hustle. This can be a weekend job in a store, dog-walking or babysitting, becoming an Uber driver or selling your handicrafts on Etsy. Don’t be discouraged if it’s only a small income; it will add up.
Make this the year you start taking control of your finances. Small steps add up to big changes at the end of a year.