As 2020 draws nearer, people begin planning their New Year’s resolutions. If you want to focus on financial fitness, having a few savings goals in the mix can be a smart move. That way, you can prepare for what the future may hold and improve your situation. If you aren’t sure where to begin, here are some new year savings goals to add to your list for the new year.
Saving Habit – New Year Savings Goals
If you’ve struggled to save in the past, make 2020 the year you create a new savings habit. Look at your budget to figure out how much you can set aside. Then, use an automatic transfer to shift that amount from your checking into a savings account on a regularly basis, such as once a month or every payday.
Even if it’s only $10 a month, it’s a great place to start. This goal isn’t about putting a specific amount away. Instead, it’s about creating a new habit. You just want to make contributing to your savings account something you always do, making it feel normal. That may make it easier to sustain after a little time passes.
Create an Emergency Fund
Another great goal for anyone who doesn’t have much in liquid savings to build an emergency fund. Having as little as $1,000 in the bank can make weathering financial emergencies easier. You’ll have cash available if you need to pay an insurance deductible, handle an unexpected car repair, deal with a medical bill, or anything else that might otherwise derail your budget. Plus, it can help you avoid debt, which is a bonus.
If you already have $1,000, then take your emergency fund to the next level. Ideally, you want three to six months of expenses covered by an emergency fund. That way, if you experience an unexpected job loss, you can stay afloat while you seek out something new.
Max Out Your Retirement Savings
If you have a 401(k) or IRA, make 2020 the year you reach the contribution maximum. For 2020, you can save up to $19,500 in a 401(k) or $6,000 in an IRA. If you’re age 50 or older, you can also sock away $6,500 or $1,000 more as a catch-up contribution, respectively.
For anyone where maxing out a retirement account isn’t plausible, just aim to save as much as possible. Consider increasing your current contribution by 10 percent. If you don’t have any retirement savings, make 2020 the year you open one. Getting started with an IRA can be fairly simple, and they are available at a range of financial institutions.
Start Saving for Big Expenses
Many people know that they have a big expense on the horizon. If you fall in that category, make saving for it a goal. Whether you want to fund a vacation, plan for a roof replacement, set money aside for a wedding, or get ahead by launching a 2020 Christmas fund, why not start now? Just divide the amount you need by the number of months you have until you need to pay the cost, and set the cash aside on a monthly basis. Then, when the day arrives, you’ll have what you need.
Reduce Your Expenses
If you’re having trouble finding money to support your savings goals, free up more cash by cutting back. Get rid of unnecessary streaming services or cable packages. Use sales flyers to plan your grocery trips. Drive less to reduce your fuel costs. Be mindful of your utilities usage.
By finding ways to cut back, you are creating room in your budget. Then, you can redirect that money toward your goals, allowing your everyday savings to help you achieve your ideal financial future.
Ultimately, creating savings goals can help you stay on target during 2020. Consider what you want to achieve and make an actionable plan. That way, you can make your New Year’s resolutions a reality.
Do you have your own new year savings goals for 2020? Share your thoughts in the comments below.
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