Most people have some sort of financial resolutions at the start of every New Year, whether it’s to be debt-free or save more.
There’s something about having a clean slate when you flip to a new calendar year that can be quite motivating.
Here are some ways to evaluate your spending and put more cash back in your pocket – and you should start now, while you’re in the throes of holiday shopping.
Trick 1. Create a “fun fund” to cover small outings or extras that come up throughout the year.
You know how you’ve had to pass on that holiday brunch or happy hour because you’re flat broke this time of year?
You can find room in your budget next time if you start socking away as little as $5 a week now.
Physically put it in a jar, or set up an automated contribution to a separate savings account. I used this approach in 2015, and I saved up enough to enjoy a last-minute weekend getaway over the summer.
I’ve since replenished the fund and dip into it here and there for everything from salon appointments to dinner dates with my husband.
Trick 2. Make a phone date.
Set aside a few hours to call your service providers to negotiate better deals. A reduction of 10% here, 15% there will surely add up.
Some places to start with include your home and auto insurers, and cable and phone companies.
It sounds like a commercial cliché, but I saved 15% by switching to a certain auto insurance, plus I scored free movie channels when I mentioned that I was considering switching cable providers.
While you’re on the phone, cancel those memberships that you no longer use (like the $10-a-month gym near your old job, or the Hulu account that you haven’t logged into).
Trick 3. Get on a level bill plan with your utilities.
I hear friends complain about huge heating and cooling bills during peak seasons killing their budgets, but I no longer feel that pain.
By requesting a level payment plan, I basically pay the same amount all year long.
This helps a lot, especially since my income fluctuates because I’m self-employed. I’d hate to imagine a monstrous electric bill coinciding with a lull in workflow.
Trick 4. Pay yourself.
This sounds like old-fashioned dad advice, but if you’re still not doing it, it’s time.
Just as you pay your credit card and rent, you should write a check or send an online payment to your savings account – you know, the one that you don’t have ATM access to.
Aim for at least $1,000 to start, which can come in handy if your car needs brakes or your sink springs a leak.
I purposely opened an online savings account (which also had slightly better interest than my local bank) when I found myself taking more out of the old one than I was putting in.
Not having that easy access has made a big difference for me.
Trick 5. Stop charging your holiday gifts.
By now, you’ve probably done the bulk of your holiday shopping, but for whatever is left, challenge yourself to use only cash.
This is a good plan going forward since studies show we tend to spend less when we use paper cash versus plastic. It will also help you avoid adding on a few gifts for yourself to the pile.
Trick 6. Have a plan for bonuses and cash gifts.
Hopefully the season of giving will be good to you in the form of some extra pocket money, but don’t blow through it without thinking.
Make it a habit to divvy up any windfalls so that a portion will go toward debt you may have, some toward savings, and some for instant gratification.
Once I started doing this regularly, I was able to pay off my credit cards and build up an emergency fund, while still getting to treat myself to something nice so I didn’t feel deprived.
Trick 7. Put a personal finance book on your wish list.
As they say, “the more you know…” Whatever your money goal is this year, educate yourself.
If you have debt to tackle, learn about the snowball method, or if you want to focus on retirement savings or teach your kids about money, read up on the best ways to do that.
I’m lucky that I’ve been exposed to some great reads because I happen to write about these topics, but all you have to do is hit the bookstore or library and you’ll find a plethora of personal finance books from which to choose, too.
Trick 8. Consider maxing out your retirement accounts.
What a great way to make your ghost of Christmas future happy and probably reduce your taxable income for the year, which will help you come tax time.
Speak with your employer to set up a large contribution before the year closes out. For some types of accounts, like my SEP IRA, though, you have until April 15, 2016 to get in your 2015 contributions.
Trick 9. Make an appointment with a financial planner, tax accountant, or credit counselor.
We invest in so many areas of our lives, but often people think paying for financial advice is a waste of money.
Guess what? It doesn’t have to cost that much at all – sometimes it’s even free!
I took the time this year to meet with an advisor from the company that I have my retirement account with, and it didn’t cost me a penny.
He gave me advice that has proven helpful and valuable (like helping me set up that SEP account). And for me — who ironically hates number crunching despite writing about money — the few hundred dollars that I pay my accountant to prepare my tax return is one of the best investments I make for myself and my business.
Don’t wait until Jan. 1st to flip the page on poor money habits. Give yourself the gift of financial freedom in 2016 by getting the ball rolling before the ball drops.