With the New Year approaching, it’s traditionally time to look at fresh starts, those tried and true resolutions that keep popping up. Having more money in your pocket, savings accounts, investments… each of these are popular goals for a wide range of Americans. If you haven’t got any financial goals that you can easily express, there’s your place to start, but if you’re like most people you have at least a running list in your head. It could be something tangible, such as a home or new car or perhaps something more modest like an upgraded television or big vacation later in the year. Unless you’ve been lucky enough to have a big bag of money fall in your lap (perhaps in the form of a Christmas bonus or significant family gift), you’ll need to strategize to finance your plans. Here are some points to think about as 2018 gives way to 2019 and resolution season fast approaches.
Recover Your Money
“Watching your money” is, for many, simply a matter of seeing cash flow out the door. Most of us don’t take a regular, realistic look at our day-to-day spending, one reason why spending seems to expand to match earnings. With the advent of online payment systems, such as PayPal and cryptocurrencies, your real-world cash may be easily connected to virtual spending systems. Where once you had to top up your online accounts with the hottest online media stores, now you can make purchases on a whim, financed by a flow of e-funds that starts at the media store, zips through your online payment source, which dips into your connected bank account. It’s conveniently seamless, but without review, it could be like blood dripping from a painless and unseen wound.
Impulse purchases, a potential issue in any spending situation, are only one threat faced in the virtual economy. You can set up recurring payments just as seamlessly. With many virtual services turning to subscription payment models, it’s easy to stack up a substantial drain on your bank account with surprisingly little effort. As these subscriptions take a quiet monthly dip into your earnings, you may have some nasty discrepancies between the running balance in your head and the harsh reality of your bank statement.
So, just as you once counted up those high-end lattes to realize exactly what they cost you each year, it’s time to look at easy online spending and subscriptions to make sure you’re not leaking cash on items you’re not using. It’s one thing to set up a subscription for an office software suite you use daily. It’s quite another to subscribe to a photo editor you use once a year after vacations. Make the adjustments, close the subscriptions and add up the money you can save.
Set Up a Savings System
Once you’ve identified savings in your discretionary spending, it’s time to define your targets, the things you’ll need money for to do what you want to do. There’s no question, this takes discipline, and in today’s society of easy credit and instant gratification, it’s simple to spend money you haven’t earned yet, a temptation that can lead to credit card debt and monthly shortfalls. Deciding on savings goals aren’t enough. Without a system to channel dollars into a savings entity, be it a jar or better yet a high-interest savings account, you may be wondering what happened to your goal come the end of 2019.
Take a lead from the online subscription concept. It’s usually easy to arrange a regular, recurring transfer from your checking account to savings accounts. Every $25 monthly savings increment you put aside adds up to $300 after 12 months. That’s an amount that’s probably easy for you commit to right now, since it’s probably similar to the price you’d pay for that high-end graphics software subscription you’re not using. If you think you can squirrel away $25 a week, you’re looking at $1,200 in a year’s time. Very little financial pain now can buy a very nice television next Christmas.
There’s no real rocket science to putting money aside with these two concepts. For the tl:dr crowd, it boils down to a) stop spending money and b) channel the money saved to a separate account. If you can set up the system, the discipline takes care of itself.