If one of your New Year’s resolutions is to be better with your money, you’re not alone. Improved money habits are one of the most common goals for those looking to make changes in the upcoming year. Have you thought beyond your aspirations to be more frugal? It can be daunting to take on a major lifestyle change without first breaking down how you can achieve it, and that often means your resolution is doomed before you even begin.
If you know you want to better with your money but aren’t sure where to start, I’ve identified four smaller resolutions you can adopt to move effectively toward a frugal and money smart 2016.
Review your spending.
Even if you do nothing else on this list, reviewing your money habits can drastically help you reduce your spending. Identify monthly expenses and necessary costs, as well as where the remainder of your money goes. It can be shocking to add up exactly how much you spend on unnecessary items, but it’s crucial to lay it all out before you make any changes.
Be specific with your goals.
Would you like to create a savings account or emergency fund, or simply put more money away next year? One way to increase the likelihood of success is to have a goal.
Assign an amount to your goals, whether it’s saving for the future or paying down your credit card. Break down how much you will need to put toward your goal each month, or even each week if it’s easier, by seeing what you can afford. You should have a good idea of how much you can afford to apply to your goals by looking at your spending habits. Make sure your goal is achievable. If later on you feel like you can increase your monthly contribution, then you can do so then. You might find you love the feeling of contributing to a goal each month and want to do more.
Look for other ways you can make your goals easier. Some find it helpful to set up an automatic savings deposit so they don’t even see the money in their account. Perhaps you can give yourself an incentive by celebrating when you meet each month’s goal, such as a long soak in a bubble bath or uninterrupted time catching up on your DVR.
Cut back on one of your overspending habits.
When you closely examine your spending over the course of a year, chances are you found multiple areas of overspending. Common culprits include high-priced coffees on a daily basis, too-frequent shopping splurges or eating out when you could have packed a lunch. In a surge of confidence, you might try to eliminate all of these “bad” habits in one go. While a few lucky people might have success with the cold turkey approach, more often a drastic lifestyle change will be difficult to take on and you’ll quickly slide back into your old habits.
I suggest taking one area of overspending and modifying it this year. If daily coffees are your vice, then try cutting it down to just one coffee shop visit a week as a treat. If you can’t resist the temptation of your favorite department store, then give yourself a spending limit and schedule a shopping trip each quarter.
Look for coupons before you shop.
This is an incredibly easy habit to adopt this year. Before you do your grocery shopping, holiday gift buying or even booking summer travel, look for ways to save. This is as simple as searching your favorite coupon website before you buy anything online or head to the store. Find coupon codes for free shipping, check out upcoming sales so you know when to shop, or save a mobile grocery coupon to your phone (and set a reminder so you don’t forget to use it when you’re at the store). You’ll be surprised at how these savings will add up by this time next year.
Hopefully you’ll find these small resolutions will make for big results in your budget in 2016. Happy New Year!
More from U.S. News
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4 Easy Resolutions for a Frugal New Year originally appeared on usnews.com
