This following is a post by MPFJ staff writer, Jeff. Jeff writes about sustainable living and finances at his website, Sustainable Life Blog. Jeff really enjoys traveling with his wife as much as he can, to wherever he can.
It’s a new year again, and it’s time to prepare yourself financially and get the rest of your life in order. While many have their goals figured out and are midway through the point where they’ll eventually fail, you can make your financial goals different this year. When you look back on 2015 in December, you can be happy with your progress.
Here are a few things you should do to make the most (financially) out of your 2015:
Increase your retirement contribution by at 10% or more
Last year, I wasn’t sure if I would be able to max out my Roth IRA account, but I knew I wanted to contribute more than I had in 2013. After talking it over with my dad, he suggested increasing my contribution by 10%. The amount doesn’t seem like much, but it made a big difference. That small monthly increase led to another 10% increase midway through the year, and things just kept rolling.
I was given some money for Christmas, and I used that to max out my Roth for 2014 – the first time in a few years I had been able to do that, since I had been paying off some debt previously.
So, for those of you looking to increase contributions to your retirement accounts (401k, IRAs or 457’s/403b’s) but are not bumping up against the government maximum for the year, consider increasing your contribution by at least 10-15% per paycheck.
Typically, it does not amount to much more than skipping one meal out per week, but the benefits at the end of the year are substantial.
Lower Your Monthly Nut
Lowering your monthly expenses is critical to increasing your cash flow and your savings. I spent most of 2013 working on lowering my monthly nut, and it allowed me to do some things that I probably wouldn’t have been able to do otherwise (like absorb a 1500+/mo cash hit).
In late 2013, I spent a day gathering all of the monthly bills for the family, and then spent the next 3 weeks researching how to lower each and every bill. I started with the big ones like home and car insurance, then moved on to smaller ones, such as cable TV, internet, and cell phones.
Even though you may only be saving $10-$25 per month on some of this stuff, it can really add up over the course of a year. We were able to reduce our monthly expenses from above $2200 to below $1500, just by making a few phone calls.
So in 2015, take a look at your bills and figure out how to lower them – even if it’s just by $10 per month. You’ll save yourself $120/year, and be happy you did.
Pro tip: If you want to lower your phone bill, look into Ting or Republic Wireless. If you want to tackle cable TV or internet, here’s a script to use when you call.
Establish a New Money Routine
This is what I’ll be focusing on primarily in 2015 – changing my money habits.
After looking at the data, it seems as though I can go Monday to Friday without spending a dime, then I’ll spend $100-$200 on the weekends. Of course, some of this is groceries so it’s not all bad, but it seems as though I’ve gone into a pattern where I save all my “pent up” spending for the weekend.
So, in an effort to lower that number, I’m going to do two things:
- Set a budget of $500 per month for all non monthly nut related things (for me, that includes gas and groceries), and;
- Extend my “no spend weekdays” by 1 day, and make Saturday a day where I don’t spend any money.
I’m hoping this will lower my total spending for the month, and help kick start me to a better habit.
What about you all? What money moves are you planning on making in 2015? Do you have other money-saving tips you found successful and would like to share with us?
Feel free to leave your comments below!
**Photo courtesy http://www.flickr.com/photos/cooperweb/8363160192/
