For many of us, a New Year’s resolution is a great way to simplify what we want out of the coming year. Each year, many people set financial goals like “be smarter with money” or “save more of my income.”
However, making the resolution to save money is easy; the difficulty comes from deciding how to save that money in the first place. Fortunately, improving your financial situation can be a pleasant side effect of making other positive changes in your life.
Learn how some popular New Year’s resolutions, as well as financial goals, can save you money.
Losing weight and overall health nearly always tops the list of most common resolutions, but a healthier lifestyle is more than just the physical and mental benefits. On average, obese adults spend 42 percent more on healthcare costs than adults with a healthy weight. Good health can provide you with more than just a higher quality of life, including a sizeable financial benefit over the course of your life. Additionally, a health-focused commuting option (like walking or biking) can provide additional savings to your budget.
Eat Less Fast Food
According to the Bureau of Labor Statistics, the average household spent $7,023 on food in 2015. From this, money spent on food away from home accounted for over $3,000. Aside from the financial impact, a 2014 study from Public Health Nutrition indicates that those who ate out consumed about 200 more calories than those who ate at home. Though grabbing a bite to eat is a fun, relaxing, and communal experience, it leaves a heavy dent in the checkbook and could add a notch or two to your belt.
Giving Up Smoking
Smoking, in addition to the well-known physical effects, is a financial lose-lose. It’s an expensive habit upfront and can lead to myriad health problems later on in life. Buying a pack per day at $6.28 will cost you $2,300 each year – over $80,000 in 20 years with inflation – and can generate thousands of additional dollars in medical costs. That money could be in a bank account instead of vanishing in a puff of smoke. The good news: when a person quits smoking, the physical and financial benefits start to become noticeable within less than a month.
Many people make a resolution to read more in the coming year but end their efforts when they can’t fit the expense of new books into their budget. Fortunately, if you go about it carefully, reading can actually be used to lower your expenses. Libraries and thrift stores can make access to reading materials cheap or free. By turning these books into a primary source of entertainment, you can cut back or eliminate the media that costs the most, like movies or cable subscriptions.
Paying off a Major Loan
Aside from health-related resolutions, the new year is an opportunity to start implementing new financial habits. Learning to live with extra payments towards loans may be a difficult adjustment at first, but by paying off a loan early, you save money that would have otherwise been lost to accumulating interest. When the loan is complete, you will have funds available that you’ve already learned to live without, providing you with a great opportunity to save more for your next goal.
Adjust Savings Percentage
The new year may come with a bonus or a raise. If your salary increases, consider putting some of that new money towards your savings. Increasing contributions to a company-sponsored retirement plan, no matter how small, can aid your retirement plan while not compromising your current standard of living.
If you're still wondering how to make 2017 a better year for you financially, we'd love to help. Set up an appointment with one of our advisors today to begin the conversation.
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