Money resolutions for 2013 that will help save you money
published on 01/06/2013
Get a handle on your finances in 2013 by making these money resolutions. We’ve compiled a list of the biggest money mistakes from 2012 that could be costing you your hard-earned cash. RCB Bank loan officers Matt Streeter and Michelle Miller offer their advice on how to correct these mistakes so you can save more money.
- Not making a budget – or attempting to stick to it. Sit down and look closely at your monthly expenses, Miller suggests. Where exactly is your money going? Cutting out the little expenses can really add up, says Miller. “That $1.50 daily coffee doesn’t seem like a lot at until you realize that cutting it can save $350 a year.”
- Not building an emergency fund – Any savings is better than no savings. Matt Streeter says your annual bonus, tax refund or a small amount each month – like the rewards on your RCB Bank my Cashback or my Interest checking accounts - is a great way to start. “You just have to start setting it aside,” he says. Consider setting it up to be automatically deducted from your paycheck or checking, making it easy to save.
Not paying your credit cards off each month – “It’s like tossing your money out the window,” Streeter says. “Money spent on interest charges and late fees can add up fast. After interest, how much did that sweater you bought with your credit card really cost?”
Use online bill pay to set up automatic payments, and watch your expenses. Don’t overspend.
- Living above your means – Carrying a balance on a credit card can become crippling if it gets out of hand. A better solution is set up a special account for “extras” says Miller. Make a pact with yourself to set aside a small amount every paycheck. “Ideally you save up the cash and you don’t need to use credit; however, no interest financing for large ticket items can be a good alternative. As long as you can pay it off in the free time allotted,” Miller says.
- Impulse buying – If you can’t give yourself a day to think about a purchase, that’s an impulse,” says Streeter. “Even worse, if you put that impulse buy on a credit card.” If you find yourself in this situation, back away and go home.
- Not planning for retirement – “Everyone should start saving for retirement as early as possible,” says Miller. If your employer doesn’t have a 401k program, open a Roth IRA. Even $10 a paycheck can add up over the years. Speak with an investment group – like RCB Wealth Management – to learn about the many retirement plans available. You should also talk to your tax advisor."
- Housing expense exceeds 30% of your gross income - If your housing expenses are more than 30% of your gross income, you should consider scaling back, suggests Miller. “Today’s economy is tough, and if you exceed this ratio you are vulnerable to serious financial problems with any disruption of wages or family emergencies.” Consider refinancing your home. Rates are low and it could save you hundreds on your monthly mortgage. “Doesn’t cost you anything to talk to a loan officer – like us - but the potential savings could be huge,” says Miller.
Everyone makes bad money decisions from time to time. The key is to recognize them when they happen.
Share your goals and concerns with family, or a friend. They may have a solution that worked for them that could also work for you. They can also help hold you accountable for your goals.
Make a list of three achievable financial goals. Example: set up an auto transfer to your savings account; bring lunch from home instead of eating out every day; or consider adjusting your cable/internet package.