The “I will spend less next year” resolution is one of the most popular New Year Resolutions of all time. Unfortunately not many people actually manage to make it work longer than a week. There are plenty of reasons for this but what matters isn’t why the resolutions tend to fail. What matters is figuring out how to make them work and that, really, is up to you. Still, here are some tips that will help you out.
Set up a savings account. A savings account is essential if you don’t want to spend every last penny that you make. Make sure that the account you open up offers you the best interest rates on savings. This way your money will make even more money for you while it waits to be used. Then—and this is important—don’t touch your savings account. Don’t use it as an overdraft account. Don’t dip into it when you see a sweater you like that’s out of your budget. Leave it alone so that, in the event that you do face a financially terrible emergency, the funds will be there for you when you need them.
Learn how to set up a realistic budget. The reason most people fail to follow their budget is that their budgets are too strict. Budget more money than you think you will need for things like groceries, utility bills, etc. Be realistic about what you buy and why. Then, at the end of the month when you have money left over, transfer the leftover money to your savings account (which, remember, you aren’t allowed to touch).
Consolidate your bills. Instead of paying them individually through an automatic checking account payment, pay them with a credit card. Set up a fixed limit secure credit card with your bank—set the limit low—a couple hundred dollars at most—and funnel all your payments through that. Then, pay off the balance every month. This will help you keep your bills paid, give you fewer payments to keep track of and help you raise your credit rating all at the same time. If you hate the idea of a secured credit card, unsecured cards are fine. Just make sure that you aren’t going to be paying an astronomical interest rate.
From here, the same basic rules of spending less apply: shop in bulk, use generic products, get your hair cut at a school for stylists instead of an expensive salon, shop at thrift stores, etc. You know how it works; you plan for it every year. With these tips, though—even if you fall down on the literal spending less, you’ll have something to back you up and keep you covered.