Happy 2018! Did you set a New Year’s Resolution to save more money this year? Are you already feeling overwhelmed? Well, you’re not alone.

The first step to achieving your savings goal is learning how to manage your money. Know where you are spending your money today and have a clear plan in place for where you want it to go in the new year and beyond.

Keep your resolution this year with five objectives:

  • Set goals
  • Get organized
  • Track spending
  • Build a budget
  • Save money

Set Goals

Remember to create a specific plan and set attainable financial goals. Wanting to save $100,000 by the time you reach 40 is a goal, but wanting a yacht is just a wish. It’s important to determine exactly what you want, when you want it, and how much it will cost.

Get Organized

First and foremost, designate a money management space. Ideally, this would be a desk at home with a computer. Other tools to have accessible would be a file cabinet, shredder, and fireproof safe. Go paperless to save on space. Sign up for online statements and utilize online bill payment tools.

Track Spending

Accuracy and commitment are vital to proper money management. You should track your expenses for a minimum of one month. However, because expenses often fluctuate, it’s better to make a habit of it.

There are many things you can do in order to stay on top of your spending.

  • Recording purchases in a log book, spreadsheet, or budgeting software can help visualize your monthly spending habits. Programs like Excel, OFX, Quicken, and Quickbooks can even be linked to your Online Banking with Pen Air to automatically report your purchases.
  • Keep your receipts and tally them up at the end of each day.
  • Use plastic as often as possible so you can refer to your statements instead of logging purchases manually.

Build a Budget

A budget is a distinct plan for what you want to do with your money. It will assist you in setting restrictions on spending so you can save for things that are important to you.

Calculating your monthly earning and spending in an organized format is an excellent way to determine exactly how much you are able to save. List your monthly income and expenses in a printable Budget Worksheet like this one. If you’d like to go a more digital route, our partners over at BALANCE also offer this online budgeting tool.

After subtracting your current expenses from your current income, you should be able to determine a difference or surplus. If you don’t feel like you’re seeing a surplus at the end of the month, or if you want it to be even larger, start tracking your expenses. Once you know for sure what the numbers are, you can choose to make changes.

Some tips to help eliminate some of the strain on your budget:

  • Many grocery stores offer discount cards at no charge. These programs plus coupons can significantly reduce your grocery bill.
  • Reduce your coffee budget. Many consumers spend over $1000 a year on coffee drinks. Make your coffee at home or at the office for a fraction of the price.
  • Cut back on going out for lunch – spending $8 each work day on a deli sandwich and soda costs over $2000 per year.
  • Do your family’s nails and haircuts at home.
  • Steer clear of dry-clean-only purchases whenever possible.
  • Consider cancelling underused gym memberships. It may make more sense to leverage the internet or DVDs and workout at home.
  • Many utility companies offer budget programs where you pay the same amount each month based on an average of past usage. This can help you avoid the difficulties of dealing with seasonally high bills.

Save Money

A general rule of thumb is that you should set aside at least 10% of your monthly net income and tuck it into your Savings Account. However, depending on your financial goals, you may want to save even more.

Don’t underestimate small steps like depositing bonuses, income tax refunds, cash gifts from birthdays, and saving loose change. These things add up, even if you have debt. If you have debt, find a balance of setting aside a portion of these funds for savings and the other portion for repayments.

It’s also important to build an emergency fund. A separate account can keep you from needing to turn to credit in an emergency. Read Emergency Savings Accounts: Where to Stash Your Cash for clear steps to take in establishing your savings.

It’s a good idea to speak with an expert about where you should put your additional savings. Our knowledgeable Member Advisors at Pen Air can help you explore options like Certificates and Money Markets. Learn more here.

Pen Air can also help you set aside a monthly amount in savings for periodic expenses like vacations or even college. Ask your Member Advisor about setting up a separate account and having a pre-set amount transferred monthly.

Budgeting to save doesn’t have to be tedious. If you are staying organized and keeping a close eye on your finances then you are already on track to keeping this year’s resolution. Stay focused on your financial goals and celebrate each savings milestone, no matter how small. Pen Air will be with you every step of the way!

Visit penair.org/Balance for even more resources to help you achieve your personal savings goals and shape up your financial fitness!