Many people make New Year’s resolutions every year. The problem is, keeping them can be a challenge. It isn’t uncommon for most people to abandon their goal by February. According to one report, only 8 percent of Americans actually achieve their objective. Often, the problem is that the resolutions themselves aren’t realistic or are too vague. Luckily, by choosing goals that are achievable and measurable, you can increase your odds of success. If you don’t know where to begin, here are some New Year’s savings resolutions that are easy to keep.
Add $500 to Your Emergency Fund
If you don’t have any money socked away for a rainy day, make 2020 the year your emergency fund becomes a priority. By getting $500 in the bank, you’re are setting yourself up for long-term financial success. When the unexpected happens, you might be able to avoid adding to your debt, and that’s a big win.
Even if you have an emergency fund, growing it is probably wise. Having three to six months of expenses in savings is a smart move, as that protects you from a multitude of hardships, including the impact of an unexpected job loss.
By aiming for a $500 boost to your emergency fund, you’re making it easier to achieve your goal while still doing something wonderful. It’s less than $2 a day, or just shy of $42 a month. For most households, that’s fairly achievable.
There are plenty of ways you can get that $500, too. You can set aside part of your income, start a small side hustle, sell items at a yard sale, or take a multitude of other approaches. It’s even possible to combine a few of those options to reach your goal. Consider what works best for you and make it happen.
Open an IRA to Save for Retirement
Saving for retirement is important for everyone. Whether you have an option through your employer or not, opening an IRA in 2020 is a good idea. It gives you another retirement-oriented savings vehicle that can work for you, giving you the ability to secure your financial future.
Even if you don’t have a lot of money to spare, there are IRA options that can work for you. Some financial institutions don’t require significant initial deposits, and some allow you to get started without having to put in a single dime immediately. You just need to make sure you can make the required monthly deposit.
In some cases, you can find options with no minimum balance requirements and with monthly deposit minimums set at $50 or less. Just make sure to review the fee structures before you commit. There are some financial institutions that have IRAs with incredibly low fees, and you might even find a few that don’t have any at all for specific kinds of accounts.
Get a High-Interest Savings Account
Saving money shouldn’t just be about increasing your balance on your own; it should also include earning interest. If you are setting money aside in an account that doesn’t have a great interest rate, you aren’t maximizing your savings potential.
Currently, according to the FDIC, the average savings account interest rate is a measly 0.09 percent. If you have $5,000 in an account with that rate (that compounds monthly), you only earn $4.50 in interest over the course of a year. In comparison, if you find a savings account with a 1.5 percent rate, you get $75.52 in interest. That’s a $71.02 difference. You essentially get over $70 more without doing any work or depositing additional money.
In 2020, make finding a high-interest savings account option a resolution. Explore online banks, credit unions, and other options that have high-yield accounts. Seek out institutions that offer 1 to 2 percent or more and don’t have any fees that chip away at your earnings. Then, open a savings account there and move your money over.
Are you trying any financial New Year’s resolutions in 2020? If so, which ones? Share your thoughts in the comments below.
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