Savings Goals for the New Year
There is no convincing argument for not saving your money. Most people will agree that saving (whether for retirement or any other reason) is an excellent idea, and it should be done.
However, the number of Americans who have no cash in the bank to fall back on is staggering. Approximately 26% of adults have no savings set aside for emergencies, while another 36% have yet to start socking away money for retirement.
Equally disconcerting are the remarkably wasteful ways Americans spend their money. USA Today listed out 20 of the top ways recently, and chief among them were: wasted energy bills, daily coffee purchases, premium cable packages, traffic tickets, lottery ticket purchases, unused gym memberships, tobacco, alcohol, gambling, ATM fees, expensive (unneeded) warranties, credit card interest, and so on.
Here are some ideas to increase your savings in the New Year:
Save your raise
If you get a raise this coming year, don’t increase your spending habits, but rather tuck away that extra money from your paychecks.
Invest your windfalls
When you receive a windfall of cash such as a bonus, tax refund, or inheritance consider investing for the future instead of immediately spending it.
Retirement
Get a 401k match, and take advantage of the tax benefits. Saving for retirement in a traditional 401(k) or IRA can help to reduce your tax bill, or you could save in a Roth account to eliminate the need to pay taxes in retirement.
Debt to savings
Once you’ve paid off any debt (credit cards, student loans, etc.), redirect the payments you were making to that debt, and put it into savings.
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David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC