New Year, New Plan, Big Savings

Dear Rich Lifer,

Did you know that one of the top New Year’s Resolutions is to save money?

On a list compiled by Statista, saving more and spending less is the 4th most popular resolution in the USA.

Now, here’s a shocking statistic. Most people quit their resolutions before February even rolls around. According to a study done by social network Strava, the day most people give up is January 12th.

This means most folks don’t even make it two full weeks with their new resolutions! Crazy, right?

The main reasons that people give up is either they’ve made their goal too big and nebulous (like, “Have $4‌,00‌0,00‌0 in the bank someday”) or they make a resolution, but then they don’t make proactive plans to follow through.

Without knowing the steps you need to make in order to achieve your goals, you might as well just be making a wish.

If you’re resolving to spend less and save more, I’ve got some tips of simple actions you can take so you can make sure your resolutions can stick and your savings can grow.

Step One: Make A Plan

No matter how much you want to save, it’s not going to be easy without a budget.

Determine how much you want to put in savings this year, and then break it down month by month. If you want an extra $6‌000 in the bank, that’s $500 a month – sounds a lot more doable, right?

Also, if you get any big chunks of extra money (like a tax return), you can apply it towards your goal immediately instead of frittering it away and then wondering where all the money went.

Fix Your Mindset: Pay Yourself First

When most people think of growing their savings, they pay all the bills, take care of necessities, spend a bit more, and then see what’s left.

Instead, take the opposite approach and move your money to savings before even paying the bills. This puts you in the mindset to save – and to make the most of what you have.

And now here are the specifics that will add up to big reserves in the long run. They make take a little bit of work at first, but the savings are well worth it.

Quit Smoking

I know you’ve heard this one before, but I started with this one because it’s the one people find the hardest. I get it – smoking is a real addiction and it can be hard to quit, but it’s one of the biggest, best things you can do for your bank account and your body.

Ditching a pack a day habit will help you save over $2000 each year – and that’s not even considering the future savings on any medical treatment you might need from smoking-related diseases.

Stop Your Subscriptions

With all the convenient options out there, it’s easy for subscriptions to add up – especially if you have other family members in your house.

If your wife signs up for Netflix, your daughter adds Disney+, and your son upgrades the cable package to make sure you’ll get all the NFL games, you could be spending a ton each month – without even knowing it. And that’s just in regards to television.

Look through your bank and credit card statements and comb through each charge.

You may be paying extra every month for software subscriptions, newspapers you’re no longer reading, a gym you no longer attend… the list goes on and on.

Once you’ve identified these useless subscriptions, cancel them and see how fast a little bit here and a little bit there add up – the potential savings is in the hundreds every month.

Dig In And DIY

When it comes to many home maintenance and repair duties, it’s all too easy to notice a problem and then pick up the phone and call someone to take care of it for you.

Of course, there are times this makes sense (like electrical work, flood abatement, or anything you can’t safely fix yourself), but there are other times that a few minutes spent watching a YouTube video and a trip to Home Depot will be all the preparation you need to get the job done yourself.

Performing your own pest control, for example, can save you up to $1000 a year, steam cleaning your own carpet can save $600 a year or more, and taking care of routine HVAC maintenance will save you a little in the short run and a lot in the long run.

Live And Die By A Shopping List

One place where many Americans spend – and waste – a ton of money is the grocery store.

In fact, the FDA estimates that we waste between 30 and 40% of the food we buy. It’s easy to do – in fact, the store itself is set up to trick you into grabbing extra items and impulse purchases, all of which overfill your refrigerator and pad your total big time.

Instead of shopping with a general idea in mind, try creating a meal plan, then making a list and sticking to it. Even if your favorite ice cream is on sale or you noticed that pomegranates are in season, if it’s not on the list, then it doesn’t go in the basket.

This doesn’t mean you have to deprive yourself, of course. Once you’re back at home, when you’re making the list for the next week, add on those pomegranates if you’re still thinking about them. Chances are you won’t be, though – the urge to make an impulse buy will be broken, and you’ll have saved a lot by never giving in to it.

Audit Your Insurances

If you’re like most people, you set up your car and home insurances… and then stopped thinking about them. Since then, though, your situation and your needs may have changed, and the insurance market may have gotten more competitive. Call your insurance company and ask for ways to lower your rates.

When you know what the lowest rate they can offer you is, the next step is to shop around. You can either use online insurance estimator tools, or call the companies one by one – either way, they want your business and they’ll offer you their best rates to get you to take it. Why wouldn’t you want to take advantage of that?

These are just a few small changes, but you can see the impact they can make on your bottom line. If you do want to save more this year, choose which strategies are right for you, and then make periodic dates to make sure you accomplish them.

With tricks like these, you’ll be sure to nail your savings goals in 2020, so get excited and get going.

To a richer life,

Nilus Mattive

Nilus Mattive

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Nilus Mattive

Nilus is the editor for the daily e-letter The Rich Life Roadmap and a Paradigm Press analyst.

Nilus began his professional career at Jono Steinberg’s Individual Investor Group, where he published his original research through a regular investment column. Later, he worked for a private equity business and spent five years editing Standard and Poor’s...

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