The festive season is a clear indication of the end of another year. As you laugh and make merry, it is essential to reflect on the past year as you plan for the one ahead. Saving money is a full time, conscious decision. You may fall under the group that was not able to save as much as they intended at the beginning of 2019. Not to worry, nothing says a clean slate like the beginning of a new year. Whatever your financial goals are, these seven tips will help maximize your savings in 2020.
Evaluate Your 2019 and Learn From It
Michelle Singletary said that most people learn how to manage their money after they make financial mistakes. You may have had cringe-worthy mistakes throughout 2019, but out of those moments comes the most important lessons. Think back on the year, calculate your expenses, and see how much you could have saved up. Learn and understand your mistakes so that you may not repeat them. By also evaluating your year, you learn about alternative solutions to your financial mistakes. In the end, you come out as a wiser person, master your financial craft, and maximize your savings.
Start Debt Free
The first challenge to deal with when trying to maximize your savings is debt. Debt can be a cage that takes away your financial freedom. Most people can't spend or save as much as they want due to the never-ending debt. This may drag you down if your objective is to save as much as you can. Try your best to clear off your debts and, if not all, the most crucial debts first. Without debt, your finances can be directed to other meaningful avenues.
What's Your Financial Goal?
Do you want to save? For what exactly? Or better yet, why? You can't be vague about your financial goal. Describe what your aim is in 2020. A specific goal gives you direction for purposeful steps to achieve it. Set your business goal before embarking on the saving journey. Write it down with the measures you will take to achieve your goal.
Budget Your Finances
It can never be over-emphasized enough why you need a budget in your daily expenditures. A budget allows you to plan the now and ahead. Not only do you live according to the set living standard, you learn to account for every dollar used.
You can opt to use the 50, 30, 20 rule. The rule states that 50 percent of your earning goes to rent and necessary living expenditures, the 30 percent goes to things such as dining and entertainment, and 20 percent goes to your savings.
Start An Emergency Fund
Emergencies tend to consume a ton of hard-earned money very quickly. Most people have gone as far as using their savings to fund emergency cases. You can never be prepared when an emergency strikes, but you can always be prepared financially not to get the blowback. Open an emergency fund that will help you be ready for such eventualities.
Kick-Off Bad Habits
Of course, you cannot maximize your savings if you do not get rid of your bad habits. It's about time you kick out bad habits such as impulsive shopping, buying expensive snacks for your pet, or overspending on entertainment. They cost you a lot of money. Instead, substitute every lousy behavior with good behavior. Instead of impulsive shopping, plan on what you would like to purchase and budget for it.
Have A Saving Challenge
A great idea to help you save would be using a saving challenge. Find a saving challenge like saving $10 every day and then increasing it to $20 the next month until the end of the year. Have fun saving and find a challenge that works for you best.
Saving is a commitment you make with yourself, and it has long term benefits. As you save a dollar at a time, make sure you enjoy the process and not dread it. By changing your attitude towards saving, you will realize how much you can maximize your savings in 2020.