7 Ways You Can Save More Money in 2016
Are you closing out 2015 with a little less in your bank account than you would like? The end of the year often means taking a few minutes to assess how you did financially over the past 12 months. If you’re like a lot of people, you might be disappointed in how much you managed to set aside.
Knowing you need to save more and being able to do it are two different things, however. How can you set aside more money when you’re stretched thin as it is? Thankfully, saving a little extra each month isn’t as hard as it may seem. We talked to some financial experts about ways guys can keep more money in their pocket in 2016. Here are a few of their suggestions.
1. Pay yourself first
One of the hardest parts of saving money is doing it consistently. You can make it easier on yourself by automating the process.
“Pay yourself first by setting up automatic savings through payroll deduction in your work retirement plan or through automatic transfers through your bank account,” Antonio Morello, the chief investment officer at McMahon Financial Advisors, said. Aim to save 10% to 15% of your salary every year, including contributions to your retirement plan. As an added bonus, those deductible retirement contributions will also save you money come tax time.
2. Spend less on food
Frequent delivery orders and dinners out with friends add up quickly. Save yourself some money by being smarter about how you eat.
“Plan your meals for the week to avoid last minute take-out orders,” Willie Schuette, a financial coach with The JL Smith Group, said. You can also save by buying in bulk and saving leftovers for later rather than tossing them in the trash, Schuette suggested.
3. Cancel subscriptions you don’t use
Do you have a gym membership you barely use or a monthly box subscription you don’t really need? Make a New Year’s resolution to cancel those recurring charges and funnel the extra money into your savings or to pay down debt. You could end up with a few hundred extra dollars in your pocket at the end of the year.
Have trouble keeping track of which subscriptions you’ve signed up for? There’s an app to help you out. Trim will comb through your credit card statements and bank accounts, find the recurring payments, and ask if you want to cancel the service. It’s free to use, though there’s currently a waiting list.
4. Watch out for hidden fees
Investing isn’t free. Fees for your 401(k) and mutual fund investments are unavoidable, but you can save yourself big money over the long term by making sure that you’re not paying too much. Gregory Hammer of Hammer Financial Group suggests keeping an especially close eye on expense ratios — the money that comes out of your account to cover the cost of running the fund.
“They vary from fund to fund, and over time excessive expenses can cost significant amounts of money,” he said. Actively managed funds should have an expense ratio of less than 1%, Micah Hauptman, a financial services counsel for the Consumer Federation of America, told Time magazine.
Investment fees aren’t the only extra charges to watch out for. Bank fees, credit card fees, hotel resort fees, and other extra charges can eat away at your budget. Planning ahead and reading the fine print before you buy can help you avoid being blindsided by these add-on costs.
5. Donate to charity
“Donating to charity is a great way to boost your deductions while helping others,” said Don Chamberlin, a Saint-Louis-based financial advisor and president of The Chamberlin Group.
You’ll need to make charitable donations before December 31 if you want to get a tax deduction when you file in April. Donations can come in the form of cash, stock, and even big-ticket items like cars, but you’ll need to itemize and keep accurate records to get the tax breaks.
6. Keep an eye on your credit
Don’t pay more than you have to the next time you need to borrow cash. Maintaining a good credit score “can save you money when it comes to buying a car or anything else on credit, car insurance, [or] buying a home,” Herb White, a financial planner and president of Life Certain Wealth Strategies, said.
Credit scores above 700 show lenders that you do a good job of managing the money you borrow, according to Experian. You can boost you credit score by paying bills on time, not running up balances on your credit cards, and reducing your debt.
7. Check your withholding
A big tax refund sounds pretty awesome. That is, until you realize that the government is really just paying back the interest-free loan you gave them.
“If you got a big tax refund it means you are having too much taken out of your paycheck every pay period,” Schuette said. File a new W-4 with your employer so that you get more of your money when you actually earn it. Then, shift that extra cash to savings or use it to meet another financial goal.