What are your resolutions this year? Every year, it feels like the same resolutions get tossed around. Work out more, eat healthier, get more sleep. Last year, I focused on making a few financial resolutions instead.
Before I dive into my money saving challenge for this year, let’s see how I did last year.
- Get my credit cards in check. I was unable to open or close any credit cards since I was in the middle of the mortgage process at this time last year. However, once the mortgage was signed, my goal was to find a credit card that worked best for our family.
- Verdict: Success! Last April, my husband and I switched to Citibank’s Double Cash credit card. We get 1% cash back for every purchase, and 1% cash back every time we pay the bill. We exclusively use this card, with the exception of when we use our Chase Freedom card. The Chase typically offers 1% cash back, but there are quarterly categories where you get 5% cash back. This month it is department stores, drugstores, and wholesale clubs. To date, we’ve made about $650 or so in cash back. Want to figure out your credit card situation? WalletHub has ranked some of the best credit cards.
- Budget. As a first time homeowner, I decided I would need to keep a budget in order to make my mortgage payments. My goal was to use a budget tracker app.
- Verdict: Fail. We ended up getting in a habit of knowing which paychecks went to our mortgage, credit card bills or savings, so the idea of a budget tracker slowly went out the window. Spoiler: this is something I want to bring back in 2017.
- Find Little Ways to Save: Now that we were in the ‘burbs, I wanted to shop the sales flyers and stop dining out as much.
- Verdict: Success! For the first several months we lived here, we never went out to dinner. We’re now starting to dine out a little more frequently, only because we know a baby is coming and we may never see a menu again without spending a ton on a babysitter. However, when it comes to grocery shopping, we use coupons, coupon apps and shop the sales flyer (and the half-priced bake sale rack).
- Continue to Max Out My 401K and Roth IRA. While it’s so easy to get wrapped up in saving for what is going on right now, I cannot forget to save for the future.
- Verdict: (Somewhat) Success! I managed to not only save in my 401K, but was able to put aside $5,000 for my Roth IRA, the max contribution. I just learned though the max is $5,500 if you are under 50, so I will have to up my contribution next year.
- Make a Savings Goal and Stick to It. Before we moved out of the city, we saved a ton of money. What worked for us was having a goal at the end of the month in our checking account that we could transfer to savings. I wanted to continue this once we moved to the ‘burbs.
- Verdict: Success! Once we moved, we changed what was important to us. While it was important to put some towards savings, we also wanted to make a few extra mortgage payments where we could. By putting a couple hundred more towards our mortgage, we’ll be able to shorten our 30-year mortgage by 6 years and 6 months. Our goal may have altered, but we were diligent about doing this every month.
Three and a half out of five goals were a success! So what’s on tap for 2017?
2017 Money Saving Challenge
Thinking ahead to next year, I’ve made 4 financial resolutions. I know not all my financial resolutions will apply to everyone, but the folks at Earnest uncovered some small achievable goals that may be better for your lifestyle instead. Plus, they added my financial goals to these graphics 🙂
Money Saving Challenge #1: Continue to max out my 401K and Roth IRA.
Yes, this is a duplicate from last year, but I still want to make this one of my goals. Plus, I now need to max out my Roth IRA at $5,500, versus $5,000! What I’d like to do differently this year is save for retirement each quarter and make a contribution, versus paying a huge lump sum once a year. At first I thought maybe I would lessen my retirement contribution in exchange for paying for my son’s college fund, but I read that college lasts only 4 years – retirement could be as much as 30.
If you aren’t at that point to even think about retirement, there are some little changes you can make. Earnest suggests skipping your favorite coffee shop and brewing coffee at home. I try to do this and opt to get my coffee at work or make iced coffee at home.
Money Saving Challenge #2: Make One Extra Mortgage Payment a Year.
Like we ended up doing last year, I’d like to make one extra mortgage payment a year. To make it easier on us financially, my plan is to put a large chunk in at the beginning of this year, with smaller increments to our monthly payments. By doing so, I hope we can reduce the length of our mortgage.
Don’t have a mortgage yet but looking for extra ways to save? One thing I’ve done religiously over the last few years is bring my lunch. My husband chooses to go out for lunch one day a week but brings 4 other days a week. I try to bring lunch daily unless we are really busy at home and it really makes a difference in how much money you can save.
Money Saving Challenge #3: Open Up a College Savings Account for My Son.
While I mentioned it is more important to save for retirement than save all my money for my son’s college fund, I still want to start saving for him. My goal is to open up a savings account for him and put together a plan on how we’re going to save for him to go to college.
Don’t have a child on the way? Earnest suggests saving money by evaluating your debt and consider consolidating and refinancing for a better rate. Or, enjoy the outdoors in August, but limit the drinking to save.
Money Saving Challenge #4: Use a Budget Tracking App.
By September, I will not only be paying for diapers, baby food and other expenses for our new family member, but I will also have daycare to worry about. Going into the holiday season, I want to know where our money is going and how we are spending it. Therefore, I’d like to spend the next few months finding a budgeting app that we like and actually sticking to it.
If budgeting daily seems to be too much, consider creating a holiday budget next year, so you aren’t overwhelmed when the bills come in January (and remember to check out my unique ways to save on gifts).
What are your financial resolutions for 2017? Share them with me! I’ll try to update you on my progress throughout the year.