If you haven’t already followed our 3 simple steps to help take control of your finances, it might be time to find ways to cut your spending, as this is a common New Year’s resolution.
Tell us where you’re considering cutting back this year, and then read on for some ideas on how to save money in the New Year.
Save on Health Care
Marshall Garrett, a certified financial planner with Zimmerman Wealth Management in Evanston, Illinois, suggests trimming health care costs in the New Year.
“Rising healthcare costs continue to be a top financial concern across the nation, but there are fundamental steps you can take to help mitigate these escalating costs while also benefiting your own personal finances for the future,” Garrett said.
A Health Savings Account (HSA) can help. “HSAs are a valuable vehicle to help manage the stress of rising health care costs through benefits like deductible contributions and tax-free withdrawals, and the added ability to invest and see potential growth in your financial contributions tax-free over time,” Garrett said. Nearly four of five people in commercial health plans are eligible for HSAs, according to a 2016 study by America’s Health Insurance Plans.
Save on Housing
Many people’s biggest single cost is housing so that’s a natural target for New Year cost control. If you plan to relocate this year, think about buying or renting a less expensive place. Mortgages and leases lock in long-term costs that are difficult to change later on.
Save on Transportation
Transportation is another major ongoing cost. If your vehicle will be due for replacement this year, remember that a new car loses a significant portion of its value when it rolls off the lot. Used cars have much more modest depreciation. This year might be a good time to buy a car that was new two years ago.
Save on Your Cell Phone
Next, look at telecommunications. “Rethink your cell phone plan,” Garrett said. “Rather than buying a subsidized phone, consider switching to a low cost carrier.” Also consider cutting the television cable and using a digital antenna to get free broadcast programming.
Save on Food
Food is another sizable outlay, but before you invest time clipping grocery coupons, reduce your eating out bill. Even coffee runs add up, Garrett noted. “Brewing your own coffee can help cut your monthly coffee expenses in half, and let you use that extra cash on other important financial areas in your life,” he said.
Packing your lunch is cheaper than picking up fast food, and is likely to be healthier, Garrett adds. “There is no harm in eating out in moderation, but making it a habit can make a big dent in your budget,” he says.
More Saving Ideas
Want more New Year savings? Find less costly home and auto insurance. Use a programmable thermostat to cut heating and cooling bills. Comparison shop on any sizable purchase, and consider monitoring your spending with an app. With savings account interest rates below 1 percent, starting now to consistently trim even a few percentage points off many or most purchases can help you benefit financially from New Year’s all year long.
Keep in mind the holiday season could also lead to spending more than you’re used to, which could drive up the revolving balances on your credit cards. In that case, you may want to consider your debt consolidation options.
So as a recap, here 9 ways to cut spending and save money in 2018:
- Tackle health care costs by checking if a Health Savings Account is right for you.
- Consider buying or renting a less expensive place to reduce your housing costs.
- Buy a used car, instead of buying new, to save on depreciation (if you’re currently in the market).
- Try reducing your cell phone and cable plans to a lower cost option.
- Brew your own coffee and pack your own lunch to save on daily expenses that add up.
- Shop around for the best home and auto insurance rates.
- Program your thermostat to cut on heating and cooling bills.
- Comparison shop for any major purchase. Every little bit counts!
- Use debt consolidation to pay down credit cards