Article and audio introduction by Samantha Kennedy, Family and Consumer Sciences

The beginning of a new year is a traditional time for setting new goals for ourselves. Two of the most common types of goals we set for our New Year’s resolutions are health goals and money goals. We want to lose weight, eat healthier, spend less, and save more.

Many of these goals, while admirable, end up unfulfilled because we either set the bar too high and get discouraged or we just do not know exactly how and where to start.

Take the Time to Plan

Setting a goal to save money is a terrific way to start the new year. Deciding how much to save, however, requires a bit of work. The first step is to analyze income and expenditures over an entire month in order to gauge just how much wiggle room there is to work with.

Tracking income and expenses is simple yet vital. For a solid month, save every receipt or write down every expenditure, no matter how small. Whether it is a bill, a book, or a bottle of water, write it down. At the end of the month, divide expenditures into categories such as Bills, Food, Entertainment, et cetera. Compare the total amount spent with total income (after taxes). Hopefully, there is not a deficit.

Look for spending leaks – expenditures that can be eliminated or reduced. Common examples include eating out a lot or buying coffee every day or going to the movies frequently. These may sound like minor expenses, but over a month’s time, they can really add up. Packing a lunch, renting a DVD, or making coffee at home can really cut down on these common spending leaks.

Some people find the envelope method of budgeting very useful in helping them decrease spending and save money. The envelope method is where predetermined amounts of cash are put in different envelopes designated for different things such as bills, groceries, rent, savings, and entertainment.

The money in each envelope is all there is to spend in that category for that month. If there is money left over at the end of the month, it is put into the savings envelope or deposited into a savings account.

One of the most common principles of budgeting and saving is “pay yourself first.” This means making savings an item on the monthly budget. Planning to save each month and making saving as important as bill paying can really help build savings over time.

Small Steps to Savings

There are many ways to save. Save loose change in a jar as a start. Open a savings account and have a small amount of money transferred to it each month from another account, such as a checking account. Start bringing coffee from home and put the money normally spent at a coffee shop into savings. Plan meals to make at home and stick to the shopping list at the grocery store. Commit to eating out one fewer time a week and add that money to savings.

Finally, set a goal to create an emergency fund in the new year. Most Americans do not even have the money to cover an unexpected $400 expense. Being able to cover unplanned expenses without creating more debt is something to strive for. Again, start small. Do not try to save more each month than can be comfortably afforded. And do not get discouraged. Every small amount saved helps. Be patient and persistent when saving and the final results will be amazing.

For more information on saving and budgeting, please contact Samantha Kennedy, Family and Consumer Sciences agent, at 850.926.3931.

Additional Resources

Building A Spending Plan (UF/IFAS Extension)

Extension classes are open to everyone regardless of race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations.

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