As people all over the country begin making (and, in some cases, breaking) their New Year Resolutions, many consider including financial goals and commitments.
As the axiom reminds us, a failing to plan is a plan to fail.
If you’re one of those who is considering saving goals in the new calendar year, here is a look at how to establish a systematic approach to saving.
According to a report published by BankRate.com, Americans aren’t saving money. Their research concluded that 28 percent of Americans have no money saved for emergencies, while another 20 percent don’t have enough saved to cover three months of expenses.
That isn’t good.
If you’re one of those that hasn’t been able to start putting money away for a rainy day, it isn’t too late. There are some simple ways to start putting money away so that when an emergency arrives, you’re ready. And when you want to book that dream vacation for the coming summer, you can afford to do so.
Remember: you work hard for the paycheck you receive, so make time to pay yourself along with everyone else.
One approach to saving is using a calendar to track your savings, and spending, on a weekly and monthly basis.
There are some great, free tools you can use to implement a savings plan.
If you have an online email account, both of those services come with free calendar programs that can be used through your computer or smartphone. Once you’re signed in, you can access the calendar through simple navigation.
Here are some steps to take from there to set up a savings calendar.
The first thing you should add to your calendar is the days you get paid. Money coming in is a much more exciting event than money leaving your account, so celebrate your paycheck by reminding yourself when that is going to happen.
If you’re someone that gets paid on the 15th and 30th of each month, reminding yourself that sometimes pay day comes early. If you get paid every two weeks, the dates on which you get paid may not line up with the 15th and 30th, so a reminder can be helpful.
Here is how to add an event to your Gmail calendar:
After you have added income to the calendar, begin adding expenses. There are some major expenses that are regular each month, such as:
- auto loan
- utility and cable bills
- credit cards
Some other events don’t always fall on the same day each month (or don’t happen every month). Some examples of these are:
- auto insurance
- family birthdays
- assessments/association dues
Make sure to include these events as well. There is one more event that you’ll want to add to the calendar each month, usually on pay day.
- pay yourself
Once you have those events added, your calendar will look like this:
Now, you can set up alerts to remind you to pay bills. These can come to your smartphone or email. This is a good discipline to establish a routine.
When all of these steps are finished, there is probably more on your calendar than you anticipated. Don’t be alarmed, though; these reminders will help you to remember each one of these important days/events.
The next step is establishing a budget for your weekly spending. You can do this by setting up an event on your calendar for the beginning and end of each week.
At the beginning of each week, mark down how much money you’re budgeting for that week.
At the end of the week, create a space to total your expenses.
The goal of this part of the exercise is for the expenses to be a smaller number than the budgeted dollar amount.
Once you have all of these steps in place, you have established for yourself a way to record your spending habits on a weekly and monthly basis.
Now we’re back to, once again, the point of this entire exercise: pay yourself.
It’s best if you do this into a separate account from the primary checking from which you pay your bills. If you don’t have a savings account, open one. When you get to the end of each week, find a dollar amount you’re comfortable with and move that amount over into the separate account.
Now you’re saving money.
What are your financial commitments or goals for 2014? Let us know on our Facebook page!