The New Year is an exciting time for fresh-starts, new aspirations and of course, New Year’s resolutions. A great 2020 objective could be finally reaching your financial goals so you can be in a better position to travel, purchase a new vehicle and yes, invest in real estate. It’s never a bad idea to start learning effective ways to save money and what better time to begin than the start of a new year?
Keep Track of your Expenses
No matter which way you choose to track your spending, it’s a smart idea to document your finances so you have a better indication as to where your money is going and how to create an accurate budget. Consider using apps like Mint or Penny. Each app links to your bank accounts and will help you understand your money spending habits and what you can improve on. If you choose to refrain from technology to track your habits, keeping a written “money” journal is an effective tracking method as well.
Set Small Goals
Great saving tips start with setting realistic financial goals. Chances are, you have larger aspirations in mind like buying a home, saving for retirement or having an emergency fund however, setting small goals is a great way to get yourself to where you want to be. Perhaps your smaller objectives could include paying off a credit card or having $1000 saved by the end of the year; both great places to start. No matter your goals, setting small targets is a great way to get yourself into a stronger economic situation.
Reducing debt is arguably the most important part of the financial process because once you’ve reduced or completely paid off your balance owing, you’ll be able to put aside more cash into a savings account. Also, reducing debt helps you reach your larger financial goals like buying a home. When applying for mortgage approval, one of the first things a broker looks at is your debt to income ratio. If you have high credit card debt or other loans in your name, this may hurt your chances at being approved for a mortgage.
Open Up a Separate Account
If you have a savings account linked to your existing chequing account and are a person who tends to spend their saved money, consider opening up a separate bank account strictly for savings. By not seeing your savings balance, you may refrain from reaching for that extra cash. Sometimes, the quote “out of sight out of mind” can actually prove extremely effective, especially where finances are concerned.
Create a Realistic Budget
When looking for money saving tips, creating a realistic budget you’ll actually be able to stick to is imperative in achieving your economic goals. Map out what you make each month (and/or every two weeks) and what expenses you pay each month. Be sure to include items like gas money, groceries, and entertainment as well as any utilities you have. Once you’ve done that, plan out how much money you can afford for debt reduction and of course, savings. This will help with your financial goal setting.
Buying a home is a smart investment decision but in order to do that, you need to ensure your finances are in order. By making the smart New Year’s resolution to reach your financial goals in 2017, you’ll fast track your way to increasing your equity and improving your future. If you’re ready to purchase a house, let’s talk real estate – contact me today.