Tue Jan 5th 2021
Whether you're saving because you want to put down a 20% down payment, creating an emergency fund, or it's a New Years' resolution, we’re going to give you some tips to save money this year!
Automating helps you save without you even realizing it or making decisions. Automate your 401(k) contribution to be taken pretax from your salary and automatic transfers from your checking into a savings account or a money market account. Sometimes an employer can even split your paycheck to go into your checking and savings accounts.
Make sure your savings account is a competitive annual percentage yield (APY). Check your checking account, too, and make sure you're avoiding a monthly maintenance fee by keeping more than the required minimum balance in your account. You can often avoid monthly maintenance fees by having a low minimum balance checking account or by having a recurring direct deposit.
Paying off your debt should be a priority. Credit card rates are still high, and they aren't expected to get lower. The only way to get this done is to pay off the debt and not add to the balance so you can avoid paying credit card interest.
Be a smart shopper this year by utilizing the cashback you get on purchases. Decide the better deal–a credit card that has an annual fee and a higher cashback rewards or a credit card with no annual fee but lower cashback.
Credit cards are usually the only cards that offer cash back, so it might be smart to invest in a credit card with good cashback rewards. Some credit card companies let the rewards apply back to the balance or to your checking account.
Evaluate your budget to ensure you're not overpaying for items that aren't being used, like subscriptions or streaming services. If you don't have a budget, now is the time to start one! A budget will help tell you where you can cut back and save instead. It will also help you renegotiate items like insurance, coverages, and other similar items.
Take advantage of your employment this year! Look at how much you contribute to your employer-sponsored retirement plan and see if it can be matched or increased. The amount you put into retirement can help reduce your taxable income.
Hopefully, these tips make you financially successful this year! If you're saving for a home, contact us to set up a plan to make that goal a reality for 2021. Reach out to us anytime: (512) 699-9714 or Tina@MallachandCompany.com
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