10 Ways to budget and save money in the New Year

The start of a new year is an exciting time, and many people think about ways to improve their financial health and habits.

Creating and sticking to a budget, paying down debt, saving more and boosting income are all potentially impactful financial resolutions. Whether you want to build an emergency fund, or save for your next big purchase, try these strategies to set yourself up for success.

1. Review your latest statements

One of the best ways to get an understanding of your spending is to review where your money is going. Look back through the previous three months of credit card and bank statements. Take note of categories where you’re spending more cash than you expected.

2. Create or update your budget

After reviewing your statements, it’s time to create or update your budget with any changes to your circumstances, income or recurring bills. This can help set you up for saving success.

3. Cut out unnecessary monthly charges

Often people sign up for things that automatically renew—subscriptions, website memberships, etc.—that they might not use or revisit. While reviewing your statements, look for services you’re paying for but not utilizing. Even if it’s only $15 a month, you’ll save nearly $200 a year by canceling just one subscription. 

4. Set saving and budgeting goals

It’s hard to focus on building your savings when you don’t know what you’re saving toward. Write down your short-term and long-term savings goals. Are you saving for retirement, for an emergency fund, and your dream DIY project? Once you know what’s on your list, it can motivate you to make the changes necessary to make it happen.

5. Make savings automatic

One of the best savings strategies takes a page from the retirement account playbook—if you have money automatically transferred from your checking account on paydays, you’ll never miss it. Set up a bi-weekly or monthly transfer to interest-earning savings account for your short-term and long-term savings goals. 

6. Use financial technology

Piggy banks are no longer the only staple savings method. There are many financial apps available that will help you spend less and put more money away. Some apps will round your purchases to the nearest dollar and put the difference in an account for you, while others analyze your spending and help you identify areas where you can cut back. Explore the financial section of your app store for ideas.

7. Consolidate your debt

If you’re carrying debt at high-interest rates—credit cards, for instance—consider transferring the balances to a credit card with a 0% interest rate for 12 months or more. Even if you can’t get your balance to zero within that time, you’ll make more headway without the interest slowing you down.

8. Save a raise

Is there a pay bump or bonus in your future? Consider putting at least half of it toward building savings. If you get a pay bump, increase your retirement account contribution by a couple of percentage points. If you get a bonus, take half of it and transfer it to an interest-earning savings account. Pay yourself first, so you're not tempted to spend it.

9. Shop around for insurance

Ask around for new quotes for your auto or home insurance — you might be able to save a lot. One NerdWallet1 analysis found that good drivers could be missing out on more than $400 in savings every year by not shopping around for car insurance. (38% of Americans with car insurance haven’t checked the price or shopped around in at least three years.) Visit the big insurers online to see what you can get for your money or give a broker a call who can compare company prices for you.

10. Use your tax-deferred accounts

Do you have a flexible spending account (FSA) or health savings account (HSA)? Does your employer offer a dependent care flexible spending account, or commuter reimbursement? Wherever you’re able to pay for expenses with pre-tax money, use the opportunity to tighten up your bottom line and take advantage of tax-deferred opportunities.

With a few steps, you can set yourself on the path to reach your financial resolutions to save more money in the new year. More conscious spending, targeted saving and smart money moves will go a long way to improve your budget and saving outcomes. If you need additional support, considering consulting with a Voya financial advisor who can look at your financial picture and help you set the ball in motion.

 

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This information is provided by Voya for your education only. Neither Voya nor its representatives offer tax or legal advice. Please consult your tax or legal advisor before making a tax-related investment/ insurance decision.
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