When a new year rolls around, many people want to get fit, land that big promotion at work or travel more, but what about focusing on your finances? It’s a resolution that can be daunting for some people, especially if savings isn’t their forte, but it’s incredibly easy to get started. If you’re ready to save some more green in 2020, I’ve outlined some tips and tricks below, including the tried-and-true 52-week savings plan, so you can stick to your financial resolutions all year long.
Try the 52-week savings plan
So, what is the 52-week savings plan? The concept is simple. You save $1 the first week of the year, followed by $2 the second week and so on. If you stick to the plan, you’ll have stashed away $1,378 by December 31, 2020, which is enough money for a decent rainy day fund. If you want to get a head start, you could use a portion of your tax refund, an annual bonus or another windfall to boost your savings.
Shop with Rakuten
Every time you shop with Rakuten, you earn Cash Back, which is a great way to generate some extra savings during the year in the form of Big Fat Checks. If I’m thinking about purchasing something, I’ll always see if it’s offered through Rakuten because I don’t want to miss out on extra cash, no matter if it’s $1, $10 or more. One tip I always like to share is: Order the essentials with Rakuten. I’m talking about everyday items you need regularly throughout the year. It’ll save you a trip to the store and your Cash Back will add up faster than you think. When you do get your Big Fat Checks in the mail, treat them as little bonuses and put them in your savings account right away.
Try a micro-savings app
There are a number of apps on the market that help you save money through micro transactions. Take Digit for example. This mobile-based service analyzes your financial habits and saves money to help you reach your goals. You get to set the goals and control how much Digit saves, but it’s best to just let the service do its thing for a month or so and see where you’re at. I use Digit and never really noticed the extra money it was siphoning off. Before I knew it, I had $1,000 saved up without ever lifting a finger.
Other services like Acorns round up your transactions and save the difference for you. The key with these apps and services is that you’re taking you out of the equation. The app or service does all the work so you’re more likely to reach your goals.
Use the snowball method
The snowball method is similar to the 52-week savings plan, but is most commonly used to pay off debt. If you have some debt you’d like to get rid of in 2020, this is the way to do it. It’s pretty simple. You make payments on, or pay off, an account with the smallest balance first. Then, you apply the minimum payment or the amount you were paying on that account to the next smallest account. The idea is that once you pay one account off, the money you budgeted to cover the minimum payment is still within your means, but you’re just rolling it into the next account to pay it off faster. Your payment grows and grows like a snowball, which is where this method gets its name.
Make your money work for you
Your money should be working for you while it’s sitting in accounts, so it’s best to make sure you’re set up to earn. Start by seeing if your bank or financial institution offers high-yield checking or savings accounts and put your savings in one of these accounts to start earning immediately. It won’t be a lot at first, but everything adds up.
Next, focus on your 401K and individual savings plans. Even if you increase your contributions by a small percentage, you’d be surprised at how much extra money you’ll put away in a year’s time.
These are just a few tips for making the most of your finances in 2020, so hopefully you’ll get a head start on your financial resolutions for the new year. As I mentioned before, one of the easiest things to do is join Rakuten and start earning Cash Back as you shop. If you’re not a member, it’s really easy to join and start earning as soon as today.