12 ways to save more money

12 Ways to Save More Money in the New Year

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You can almost set your calendar to it: the end of one year and the beginning of another is a time when many people vow to change their ways and live more frugally. Whether it’s limiting spending on takeout or vowing to hit the gym every Monday, Wednesday and Friday, people make all sorts of resolutions. Unfortunately, most don’t last very long. That’s because New Year’s resolutions are not so much about making changes as they are about saying them. Once that first moment of panic has passed (or in some cases, fear) what will remain are old habits and new resolutions that didn’t stand a chance against old habits. Fortunately, there are plenty of other ways to save money instead of just making a pledge to do so again next year. Here are 12 ways you can save more money in the new year and beyond...

Pay off your debts first

Any resolution that focuses on getting out of debt should be your first priority. It might sound counterintuitive to focus on paying down the things that are bringing in the cash, but keep in mind that you aren’t doing yourself any favors by carrying larger balances on credit cards or a car loan. Interest rates on loans like these are high enough to eat up plenty of your cash—even if you are making payments. Besides, every dollar that goes toward paying off debt is a dollar you won’t have to commit to future interest payments. You’ll be saving money while also making room in your budget to start saving a little.

Commit to a grocery budget

If you’re a young adult without children, you might be tempted to dump the idea of a grocery budget in favor of “eating well.” Try not to succumb to temptation. Whether you choose to “eat well” or not, a grocery budget is a great way to help cut back on spending. Even if you make more than enough to cover a monthly budget, it’s a good idea to put one in place. Why? Because it’s hard to spend what you don’t have. And even though you may be making plenty of money, that doesn’t mean you’ll be able to spend just as freely. By implementing a budget, you’ll still be able to do some of the things you want to do, like eating out with friends or treating your family to fun activities. You just won’t be able to spend money as freely as you did before.

Track your spending for a while

If you really want to see where your money is going, then track your spending for a while. You could use a tool like Mint or you could simply keep a log of your purchases. The goal here is to understand your spending patterns so that you can better identify opportunities to save money. For instance, if you know that you spend $500 a month on groceries and that’s pretty much all you spend, then you might want to consider other ways to cut back. If, on the other hand, most of your spending goes to transportation costs, it may be a good idea to start a carpool or take the bus to work.

Replace your broken stuff

Before you go out and buy a new thing, see if you can’t find a way to make do with what you have. You might not have noticed, but your stuff is actually falling apart. Take a look around your house, office and car. Is something broken? If so, is there a way to repair it instead of replace it? If you can avoid buying something new—whether it’s a new car or a new appliance—do so. Doing so is not only frugal, but it’s also environmentally friendly. Replacing your broken stuff is also a good idea because you don’t know what the future holds. You might be able to put off buying a new car for a little while, but you may need to replace that broken washing machine in the next year or two.

Diversify your investments

According to financial experts, you should try to diversify your investments as much as you can. And that doesn’t just mean investing in stocks and bonds. It means that you should also try to invest in real estate, commodities and other types of assets. While you don’t want to put all your eggs in one basket, you also don’t want to spread your money too thinly. Make an effort to diversify your investments so that you aren’t as heavily tied to one sector or one type of investment. If stocks take a dive, you’ll be glad that you have a healthy amount tied up in bonds and commodities. Additionally, you may be able to reduce some of your tax burden.

Save for the future

While it’s important to keep an eye on your short-term savings goals, it’s also important to save for the future. You might be able to get by for the next couple of months by purchasing used clothing and skipping the occasional meal out, but what about a year from now? What about when you have a child or two and you decide to go back to work? What if you lose your job or get injured and can’t work for an extended period of time? It’s easy to let your short-term savings goals take precedence over long-term goals. After all, it’s much easier to spend a little less each month and put the money toward a short-term goal than it is to save enough money to cover your expenses for the next six months.

Bottom line

The new year is a great time to start saving more money. And you don’t need to make dramatic changes in your lifestyle to do it. Simply committing to pay off your smaller debts, tracking your spending and replacing your broken stuff can save you plenty of cash. Plus, you’ll be in much better shape when you’re ready to start investing for the future.