Now that we’re well into 2014, we’ve had ample time to make – and break – some resolutions. Ah, the New Year's Resolution. Many of us make them with the best of intentions when the calendar changes to a brand new year, using the clean slate as a way to motivate ourselves to make changes. However, resolutions are often easier said than done. According to Forbes, only 8% of people who make resolutions actually achieve their goals by the end of the year.
If one of your resolutions is to save more money in 2014, there are some steps you can take to help reach your monetary goals. Whether you want to have a larger savings account, pay down debt or just have extra cash to spend, it is possible to get into fiscal shape this year.
Break out the Budgeting Software
Creating a budget is one of the quickest ways to determine where you are spending money and where you'll be able to cut back. Start by listing all of your monthly expenses, including rent, electricity, telephone, internet, and whatever else you will need to pay every four weeks. To see how much of your income you are spending on each item, you can use a budgeting software that is simplified for home use (such as Quicken).
When it comes to determining how much of your take home pay you should spend on everyday items, the popular "50/20/30" rule. This equates to 50% of your income going towards your rent, electricity bills and other essentials, 20% being set aside in a savings account and being used to pay down debt, and 30% being used for everyday expenses like coffee runs and gym memberships.
Cut Back to Get Ahead
Track your everyday spending for one month, keeping every receipt and entering your purchases into your budgeting software (or even an Excel spreadsheet of your own creation, if you're handy with computers). This will give you an honest, unblemished look at exactly where you spend your money each month. That coffee that you grab every morning may seem innocuous enough, but when you see the total amount you spend over one month it can be very sobering. You can now use this knowledge to decide what you are willing to cut back on so that you can save more of your hard-earned cash.
Take Stock of Your Abode
In the wintertime, do you feel drafts coming in from your windows or doorframes? If yes, you're likely spending more money on heating your apartment then you need to. Speak with your landlord about having your windows resealed and use an old towel or sheet to block the drafty air from blowing in under your door. Take a look at where your furniture is placed throughout your apartment - is your couch covering a heating vent? This blocked heat will make your home feel colder and make you crank up the thermostat when it's not necessary.
In the heat of the summer, you can save money by only running the air conditioning on days where the mercury reaches a certain level (decide your comfort level beforehand - everyone is different!). Otherwise, opening windows to create a cross-breeze, employing floor and ceiling fans and keeping shades closed during the hottest portions of the day will help you to keep your apartment cool without raising your electricity bill.
Apartment Therapy has even more great tips for sticking to your New Year's Resolution in their article "11 Ways to Save Money at Home, Painlessly":
- No fun, no parties: Saving money doesn't mean staying home by yourself, twiddling your thumbs. But it might mean less time out and more friends over. Try potluck dinners, game nights or movie nights at home (split a Netflix subscription with friends). We like brunch: it's an inexpensive meal, one person brings the papers & we all share. Less paper waste, too.
- Stretch out your weekly or monthly costs: If you do your grocery shopping every week, try stretching it out to 10 days. Stretch out month services for every 5 or 6 weeks. It's a small change with big returns.
- De-clutter: Not only will you get rid of stuff, but you can make money by selling it on Craigslist or EBay.
- Pay your bills online: Not only will banking online save you money in stamps but it'll help you keep a tighter rein on your finances and avoid bank charges, including overdraft or bounced check fees.
- Swap out regular bulbs for CFL's: Yes, the initial outlay's a little more expensive (dropping all the time) but they last longer so you'll have fewer replacements. And they're good for the environment so you're saving a little green at both ends.
- Bundle: Receiving cable, phone and internet from one provider often entitles you to a discount on those services. Call and ask for a reduced rate.