Starting a successful savings plan

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Many people start the New Year with a financial resolution: to reduce debt, save money, spend money more wisely, increase their retirement savings or something similar. But despite good intentions, New Year’s resolutions often get abandoned. To stay on track, consider the following tips, which are designed to help you achieve your financial goals.

Write down the goals and post them in a visible place to serve as a daily reminder. The fridge, bedroom mirror or your computer are good places to keep your goals in sight.

Plan out step by step what you have to do to achieve your goals. This kind of planning forces you to visualize and then to realize the steps. For instance, if you want to save $2,000, you might open a savings account and have a set amount moved into the account each time you get a paycheck. That way, the money is “gone” before you can spend it and will accumulate in small increments, usually 26 or 12 “payments.” So you aren’t tempted to use the money for another reason, think of it as literally paying a debt to yourself.

Track your progress. Putting pen to paper, creating a spreadsheet, or filling in a ledger—these regular reminders help you remember your goals and how important they are.

Take pride in your accomplishments, even the small ones, because they add up quickly. Eating breakfast at home every morning could save you $3 to $5 dollars a day which, over a year’s time, adds up to a savings of $750 to $1250. Even forgoing just one breakfast out a week could put an extra $150 to $250 in your wallet.

Don’t get discouraged if you need to rethink your goals. Economic uncertainty is the new reality, so it’s important not to underestimate how things can change quickly. Unforeseen circumstances, such as a reduction in working hours or a large medical expense, could force you to change your savings plan. The best way to cope with these kinds of situations is to be fiscally fit, and if you are already following a plan, then you are working to achieve fiscal fitness.

For more information, please contact the Trimble County Cooperative Extension Service.

Source: Jennifer Hunter, UK extension specialist

Jane Proctor is Trimble County’s Cooperative Extension agent for family and consumer services.