A new year is the perfect time to evaluate your money saving methods. The beginning of the year is also a good time to figure out some financial goals you hope to meet for over the next twelve months, especially if you have any major life events happening (i.e. a wedding, baby, purchase of a home etc...).
Sara Margulis is the CEO and co-Founder of the #1 online registry site, Honeyfund and the successful crowdsourcing site Plumfund. She is an expert on wedding gift etiquette, crowd gifting, entrepreneurship as well as financial planning. Here, Sara provides some great tips on how to plan and save your money to meet and hopefully exceed your financial goals in 2016!
Plan Ahead and Know What You Can and Can Not Live Without
First, figure out how much you want to spend on the occasion (wedding, new baby, vacation, new home etc…). If you have some money already set aside, subtract your savings from your budget. That's how much you still need to save, or your savings goal. Divide the savings goal by the number of months you have until the occasion. That’s your monthly savings goal. It might be helpful to ask your employer to divert that amount from your paycheck each month, that way your savings are going seamlessly into your account without any extra work from you. Since you’ll now have less money coming in for living expenses, you may need to adjust your daily spending habits. The easiest and most impactful thing to cut out is daily expenses like morning coffee and eating lunch out. Avoiding Starbucks + bringing your lunch to work 5 days a week should net you about $80-100/week!
You’re Never Too Young to Save
Your mid-twenties is the best time to start your retirement account. You have time on your side more so now than any other time in your life, which means you will get the maximum benefit from compounding, or the ability to earn more money on the earnings in your account. It’s also the time in adulthood when you are likely to have the fewest expenses — before you have a home mortgage, multiple cars, children, etc. That’s why you should max your contribution to your 401(k) now, especially if your employer has a matching program. The compounding factor plus maxing out employer matching is two opportunities for free money you may not have any other time in your life!
Check In With Yourself
Earning more income is a great strategy to help you meet savings goals and set yourself up for a solid financial future. Take some time to do a career checkup. Ask yourself these questions: Are you in a job with upward mobility? Maybe it’s time to ask your employer about a promotion. Even if you aren’t ready now, what are some things you could be doing this year to set yourself for a promotion later on? Are you due for a raise? If so, don’t be afraid to ask your employer — it often won’t come unless you ask.
If you have some savings outside your retirement account, look around for some investments that can earn more money on your money. Savings interest rates are at historic lows so you might need to think outside the typical savings account. One example is a peer-to-peer lending programs like Prosper.com, which can return 6% or better depending on your risk tolerance.
How Can A Website Help Me Save?
Honeyfund and Plumfund can help you stick to your budget by inviting friends and family to support your goal – whatever it may be -- as a gift. Want that once-in-a-lifetime honeymoon but it doesn’t fit your budget? Create a honeyfund for friends/family to give you a luxury honeymoon experience as a wedding gift. Turning 30 and always wanted to start that business or buy that first home? A Plumfund birthday fund can offer friends and family, near and far, a chance to be part of making your dream happen. Even when life brings you unexpected hardships, friends and family will want to support you and Plumfund gives them a place to do it. Both sites offer 100% free options as well as the lowest processing fees in the crowdfunding industry. Both sites are built on 10 years personal gifting and etiquette experience, so giving feels good and contributors are never charged a fee.