The New Year presents a new opportunity to wrangle your personal finances. Saving money without a budget is like building a house without blueprints. Generating the most gains in your savings account will require discipline and in some case, creativity. Here are some standard savings tips with a few unconventional ones thrown in for good measure.
- Make sure you’re getting what you deserve
Whether you are an experienced worker or just starting out, negotiating a higher salary can be daunting. With the job market improving, workers are finding better opportunities to advance outside their present employer. If you are an experienced employee, be armed with all the pertinent information regarding your contributions to successes and how you’ve expanded your knowledge and skills during your tenure. For newcomers to the job market, don’t be afraid to ask for what you are worth, but also acknowledge that unless you have experience working in your chosen career, you may be forced to make concessions. Don’t be discouraged if you are negotiations aren’t yield more money – be open to other forms of compensation such as coverage insurance premiums, vacations, and savings programs.
- Manage your Credit Wisely
The average American has three credit cards. Your credit score and debt load are important aspects of your personal finance picture. Taking control of your money in 2015 will require you to put in the time to clean up any credit issues that are slowing down your financial growth. Once you have reviewed your credit worthiness and made any necessary corrections to your report, move forward by limiting applications for credit, as they are a signal to creditors of financial distress.
- Healthy, Wealthy, and Wise
Illness is a leading cause of missed time from work. If your employer does not have a forgiving sick leave or family illness policy, you will be missing earnings during any absences from work. Medical expenses are a leading cause of bankruptcy in the US every year, so having an understanding of all the programs available to assist you in an unforeseen long absence will help protect your financial health. A new program for federal workers provides six weeks of leave for illness and other covered conditions. This model is being mirror in several states and could soon become the norm. In the interim, employees should familiarize themselves with what is offered in their state and by their employer.
- Save, Save, Save
Saving is a consistent challenge for many Americans. Advisors suggest a minimum of three months of cash reserves to cover living expenses in the event of an emergency. Savers are encouraged to have an account with cash reserves and an account for retirement savings. With traditional accounts experiencing lower rates on deposit, many savers are opting for online banks with better yields. Individual Retirement Accounts (IRAs) and 401k programs are still very popular savings plans for the future. Employees can use payroll deductions and electronic transfers to automate savings plans. Using a combination of these can ensure your have a well-funded retirement account when you are ready to leave the workforce.
- Plan for the Future
Once you are ready for retirement, you will need to make your money last. In the months leading to exiting the workforce, retirees should do a trial run of their finance plan to test it for feasibility. If you find your plan will not work, you still have time to continue to invest. There are tools online that will allow you to analyze your total retirement financial package, pension, savings plans, and social security, and give you a projection of how long your income will exceed your expenses. These models can help you protect your financial health if this is the year you plan to retire by assisting you in your goals to make realistic assumptions regarding the longevity of your retirement fund.