One of the most popular New Year’s resolutions involves increasing your savings. It is along the lines of paying off your debts or buying something important. But sadly, not everyone is successful in following their resolutions. In most cases, people start working on their saving goals – only to fail after a few weeks or months.
While it is hard to quench our compulsion to spend every extra money that we have, this 2015 may prove to make saving a whole lot easier. That is thanks to the expected lower expenses – at least when it comes to fuel.
According to AAA.com, the plunging gas prices that started late in 2014 already helped Americans save $14 billion. This is compared to the year 2013. That means that the average American household was able to save $115 worth of gas expenses. This was only a few months in 2014. Imagine how much savings you can get if the declining gas prices happen the whole 2015?
5 goals you might want to start saving for this year
While the potential to save is not only bound to the falling price of gas, you should understand the potential that it will give you to reach your saving goals. There are so many things to save up for – that is why you should take advantage of any opportunity to increase the money that you can save.
In case you have yet to decide on the financial goals that you can save up for, here are 5 things that you can start building this year.
If you have to save up for something, an emergency fund is the best place to start. Not only will this keep you secure financially, it will also allow you to avoid incurring more debts. Sometimes, people only get into debt because an unexpected expense forced them to borrow money – or use their high-interest credit cards. If you have built sufficient funds to use in case of emergencies, you will be spared from the need to take on credit.
Debt payment fund
Another important fund that you may want to include in your saving goals is your debt payment fund. Most of you will think that this is an expense and not a saving goal. However, you need to understand that getting rid of your debts will help you save in the long run. When you lose your debt, you save money. All type of debts come with an interest rate. The longer you stay in debt, the more interest amount that you are paying for throughout the duration of that account. If you cut off your debt faster, the lower amount you have to pay towards the interest. That translates to savings.
This is always present when saving goals are being discussed. Most financial experts would say that the earlier you start with your retirement fund, the better it will be for you. Sadly though, this is an advice that is hardly being followed – at least, not as it should be. Young people are putting it off because of their student loans. Those in their 30s and 40s put it off to raise a family and make investments in their home. Even those in their 50s are not as aggressive as they should be when it comes to saving for their retirement. An article published on USAToday.com revealed that 71% of those in their 50s lack the confidence that they have enough retirement savings. This data was taken from a survey done by Wells Fargo involving 1,000 respondents. If you know that you are one of those who are not confident about their retirement, you need to make this a part of your saving goals for this year. Start putting away money. Put in as much as you can at the moment. It may be smaller than what you should be contributing but it is better than nothing.
Maintenance and repairs fund
One of the most overlooked expenses of American households involves the maintenance and repair requirements of both their homes and vehicles. A transmission that blows up at the wrong time can lead you to debt. A bust A/C unit can also make your life miserable if you fail to have it fixed. These costs could lead you to rely on your credit card for help and that is a debt that you do not want to accumulate because of the high-interest rate. Since these regular maintenances and repairs will happen, why not just prepare for them? Instead of waiting for them to happen, you may want to just save up money so you can pay in cash when something happens.
Paying for your travel expenses through a credit card is not only convenient but also keep you from the danger of carrying around too much cash. However, this does not mean you should not save up for it. While travel payments are best paid through credit card, it is important for you to know your limit. You still have to save up for your vacation so you that you know just how much to spend. Not only that, you have the funds available to pay your card balance in full when the billing comes. That is how you prepare for your vacation. You can really enjoy it because you know that this trip will not put you in debt.
Financial goals you can start saving for now
Apart from the 5 saving goals that you can start this year, there are also a couple of financial goals that you may want to work on as soon as you can. Take advantage of the economy and the lower prices. Instead of immediately upgrading your lifestyle, you may want to hold back for a moment and identify the goals that you can target. These goals will not only get you to save money, it will also put you in a position of comfort, convenience, and security. Some of them can even help you grow your personal net worth.
Here are financial goals that you may want to work on his year.
- Having a new car. In truth, this will not really help you increase your personal net worth because of its depreciating value. However, it can help you in the comfort and convenient department. Besides, paying a car in cash will help you get more value out of it. So if you do not have to buy a car now, why not save up for it so most or all of the payment for the new car can be in cash? You might even get a better deal by paying cash instead of credit.
- Down payment of a house. Another financial goal that you can include in your saving goals is the down payment for your new home. While it is a big investment, it will help you save a lot when you finally buy your home. The more you pay towards your down payment, the less you have to borrow on your mortgage.
- Education fund. Whether this is for your child or this is for your own professional advancement, you need to save up for a school fund too. According to CNSNews.com, Federal student loans have reached more than $800 billion. The outstanding student loan is not as $1.13 trillion – a scary growth that you should not be a part of. In case you want to go back to school or help your child avoid it, you should start saving for your/their education.
- Investments. Finally, you want to build up your investments. If you want to make money by saving money, this is what you should do. Instead of just putting the money in your savings account, you want to invest it so it will grow more – thanks to the interest.