Have you made a New Year’s resolution about money?
Maybe you want to start an emergency fund, pay off your credit card debt or even save so you can pay for a dream vacation with cash.
If you’re setting your sights on making a big financial change in 2015, you’ve got lots of company, but not as much as you would have last year. The 2014 Fidelity Investments annual survey on New Year’s resolutions shows that almost one-third (31 percent) of Americans are considering a money resolution this year, down from 43 percent last year.
New Year’s resolutions actually might help you reach your goal, the Fidelity survey found. In fact, 51 percent of consumers who made a financial resolution last year say they’re better off financially now, compared with 38 percent of those who didn’t. I’ve found that to be the case for me — I usually make some kind of financial resolution, and it always serves as a motivator. Even if I don’t succeed completely, I usually end up in better shape moneywise than I was the previous year.
The top financial resolution for this year? Save more. About 55 percent of those making a financial resolution say that’s their goal, according to the survey. And the median amount these savers want to tuck away is $200 more a month.
If you’re making a similar resolution, here are four ways you can save a few hundred dollars per month:
1. Cook at home more. Eating out once a week can eat up hundreds of dollars per month, writes Sophia Bera, a financial planner and founder of GenYFinance.com.Cooking at home is healthier, anyway. As the New York Times points out, it’s easy to get an entire day’s worth of calories or more in just one restaurant meal. Bonus: If you made a resolution to get healthier (and who didn’t?) this change will move you toward that goal.
2. Banish costly bad habits. Another way to save $200 a month and be healthier is to just cut the junk — candy, chips, soda, alcohol, cigarettes — from your shopping list, Bera writes.
3. Save on cellphone service. You should stop overpaying for cell service, Bera writes. I agree that this is one of the best ways to save, and I’ve written about how I cut my cellphone bill in half by switching from a contract plan to Ting, which charges based on how much service you use. It saved me $75 a month, and a blogger from You Need a Budget saved $110 in a month. You could save more than that, depending on your usage and family size.
4. Cut unnecessary recurring costs. The bane of recurring costs is that they can seem small but really add up. On the flip side, that makes them the perfect target for savers looking to cut fat from their budgets. One recurring cost to reconsider: your gym or yoga studio membership, Bera writes. You could probably save $150 a month by cutting both and using free online workouts instead, she writes. Also, look for recurring costs such as bank service fees that you might be able to get waived by, for example, setting up direct deposit. And, finally, look for services or subscriptions you don’t need. Ready for Zero recommends cutting cable to save $100 a month.
If you succeed in saving $200 a month, what should you do with it? You could pay off debt, as 20 percent of financial resolution makers surveyed by Fidelity say they plan to do. Or, set up a Roth IRA with an automated $200-a-month contribution, Bera recommends. With compound interest, that $200 will be worth a lot more by the time you retire.
Can’t you almost hear the “cha-ching!” as you ring in 2015? Happy saving.