A new year - clean slate, as you will.
This is the time for keeping resolutions and goals. A new program I offer equates several of the actions for weight loss to establishing a financial cushion (Small Steps to Health and Wealth). We know we need to save, but money just seems to disappear before we get anything to the savings account. This year, more than ever, many are living paycheck to paycheck with that monthly shortfall drawn on credit cards or taken from savings.
For starters, take a serious look at what your expenses are and then establish goals - short-term (one year). Financial planning is critical regardless of income. Those with a plan save twice as much as those without one. Here are some starter, tried-and-true ideas:
•Set up a program to have the money deducted straight from your paycheck. The recommendation is to have three to six months of expenses in emergency reserve to provide for unexpected needs.
•Just like you do with phone, utility, etc., pay your savings bill monthly into a savings account. Saving $20 per month gets you $244 per year (with 3 percent interest). At five years, this becomes $1,292 or $1,650, and at 14 years it doubles - look where you would be if you had started this in 1997. Tomorrow is today's yesterday.
•We are using coupons more - save the money. Put aside the amount you "saved" in a coupon jar. Every month, add this to your savings account.
•Evaluate the loans you owe - pay extra on those with the highest interest. Once you have paid off a loan, pay that amount to your savings account. You were able to get along without this for the duration of the loan.
•Some say bank your raise or 1 percent of your paycheck - any amount is a good start.
•Collect loose change in a money jar - you'd be absolutely amazed at how fast it collects, especially if the family agrees on a goal for the money collected at the end of a set period of time. At the end of each day, empty your pockets/purse and put the change in a special container. Once a month put the change in the savings account. Some people keep all their change - pay with bills, save coins.
•Save lunch money. Make your own lunch. Save the $5-10 you would have spent.
•How about a "Nothing Week." Agree to one week every two months to spend no more money than is absolutely necessary. Instead, do special activities that don't require spending.
•Look for your money habits and decide if you want to alter them. Things like a weekly car wash at $7.50 would be $30/month or $390 annually. How about the hand- wash bay or the garden hose (after the thaw). If you are feeding the pop machine at work or school even once a day, save yourself 20 to 45 cents a day by bringing soda from home. Better yet, a water bottle filled daily would save you 50 to 75 cents per day, or about $182.
email@example.com or 247-4355. Wendy Rice is family and consumer science agent for the La Plata County Extension Office.