Now that the holidays have come and gone, it’s time to get back into the swing of things. A new year brings many opportunities. At the same time, realizing goals requires a fair bit of reflection, planning, and action.

Many people make New Year’s resolutions, goals aimed at self-improvement. Unfortunately, most of these resolutions are set without a concrete plan or actionable steps, which can cause people to fall short of their goals.

If any of your resolutions involve being more mindful of your money—saving for an emergency fund, being more accountable, or cutting down on spending—it may help to incorporate some of the following strategies into your plans. Try a few of these suggestions to see if they work for you.

Automate Your Savings

This may be the year you bolster an emergency fund. Or another car is in the cards. If one of your big goals this year is to reach a savings goal, it may help to automate your way across the finish line.

There are several ways to “automate” contributions to a savings fund:

• Take advantage of direct deposit: If your employer pays through direct deposit, you can work with payroll to automate savings. Splitting your check between your regular spending account and a dedicated savings account may be possible. This makes saving money second nature, just like brushing your teeth.

   

• Use tools from your financial institution: Some institutions allow users to automate transfers between their accounts via digital or online banking. You can set regular intervals for a set amount of money to go from one account to another. Just be mindful of whether your accounts limit how much and how often you can make moves per month.

   

• Set reminders manually: This method doesn’t feel as high-tech as the others, but it does allow you to get used to a routine. Mark a calendar with the days you will move your money to a savings account. Stick to the schedule and use your transfer method of choice. Use the reminder feature on your phone, or use an analog calendar in plain sight at a place you see frequently.
  

When saving money becomes as simple as breathing, it feels much easier to reach these goals. It’s also one less thing to worry about because you’ve already set systems to handle it.

Cut back a Bit on Subscription Services

If there’s one entity that’s gotten automation down to the letter, it’s service providers. There are many services we sign up for that require monthly payments. They might include:

• Subscription boxes
• Magazines and periodicals
• Digital Entertainment and streaming services
• Bulk items from online retailers (think “Subscribe & Save”)
  

A side effect of the subscription-based model is that it is very forgettable on the consumer side. If someone isn’t careful about keeping track of everything they signed up for, they may lose a ton of money each month and not even know it.

If you’ve signed up for subscription services, it might help to do a start-of-year audit of all of them. Take stock of everything you are currently signed up for, and determine what you need and can do without.

Nowadays, there are many apps that you can use to conduct a “sweep” on your financial accounts to see if they’re linked to services you no longer need. They’re called subscription trackers and managers. Examples include Rocket Money and Trim by One Main.

The basic functions of most of these apps are free, but some may require money (or a subscription) to unlock more features, such as negotiating a lower bill on your behalf. Regardless, trying out these apps may be worthwhile if you’re looking for ways to trim your monthly expenses. You may be surprised at a subscription or two you forgot about!

Think about Higher-Yield Savings Vehicles

Now that you’ve done some automation and perhaps shut down some processes yourself, it’s time to think about where all your newfound savings should go. Ultimately, the choice is up to you. However, two savings vehicles might capture your attention.

The first is a certificate of deposit, also known as a “certificate,” “CD,” or “share certificate.” This is a savings vehicle where you deposit a set amount of money with a financial institution, which will accrue interest and earn dividends for a predefined period. Terms for a certificate can range from a few months to several years.

Certificates may be a good option if you have money you know you want to save but want it to grow a little more compared to keeping it in a traditional savings account.  However, the money you put into a CD is “locked in,” meaning you can’t access it before it matures. Doing so incurs a penalty that may negate the benefits of the CD.

To learn more about the benefits of a certificate of deposit, read up on it here.

Another option is the money market account. This savings vehicle has a higher dividend rate than a traditional savings or checking account. When the money in the money market account reaches certain thresholds, it will earn more dividends. 

Money market accounts shine in their flexibility. You can still withdraw and transfer with this account without incurring any penalties. However, remember that you’ll need to maintain a minimum balance to take advantage of the higher dividend rates.

One possible use for a money market account is for an emergency fund. It can reserve money for a rainy day while earning tidy dividends.

This year is a fresh start to look at your finances from another perspective. By assessing your financial goals and taking actionable steps to save now, you may be surprised at the progress you make later.

First Florida is your partner in financial wellness and education. Why not tune into one of our upcoming webinars for more opportunities to broaden your knowledge? We cover various topics that may help you stay on top of your finances. View our calendar and sign up to attend a webinar.