You no doubt have lots of goals to accomplish in 2020. It’s not uncommon to make and break resolutions. But one resolution you should stick to every year is saving more money. American Bank & Trust has some advice to help you achieve your 2020 savings goals.
Take Care of that Debt
Savings 101 tells us to get rid of any debt. Debt looms, adds interest and gets in the way of any goals you have. It can come in several forms:
- Credit cards
- Personal loans
- Car loans
- Department store cards
It’s always a good idea to tackle your highest interest rate debt because of the additional interest you are paying. Another popular method is to make minimum payments on all debts except your smallest. This achieves a couple things.
First, when you aggressively pay off your smallest debt, there is the emotional reward of making progress. Secondly, when your smallest debt is paid off, you roll that payment into your next smallest debt. This pays off your larger balances faster.
Specify your Savings Account
What do we mean by specify your savings account? Basically, assign a savings account to things you know you will have to spend the money on.
- Home upgrades
- Home repairs
- Car maintenance
Emergencies do happen. Some are more serious than others. But you don’t want a fender bender or tree branch to break your monthly budget.
Speaking of Monthly Budget…
Do you have a budget? Having money left over at the end of the month doesn’t qualify. You have to know what you spent it on.
Make a list of all income: job, rental property or hobby. Then make a list of all expenses: housing, food, insurance, car, utilities, personal spending, saving, etc. When you do, your percentages should look something like this.
By making a budget, you’re not only better aware of what you can afford. You’re more aware of unnecessary expenditures or areas you could trim to meet your money goals.
Diversify that Savings
Everyone wants retirement plan income, so if you don’t have a Roth IRA or 401K, now is the time. But don’t stop there. You want to diversify. That could include:
You’re American Bank and Trust investment advisor can help you determine where and on what. We’ll help determine your risk tolerance and help determine the right mix for you.
Embrace that Hobby that Pays
Maybe one of your financial goals for 2020 is to make a little extra. Doing so, even with a little spare change can make a big difference.
Turn that photography hobby into family portraits or senior pictures. Sell something online or pick up the odd jobs here and there. Tough Nickel has some fun ideas on popular side hustles for 2020.
Make 2020 Great
You can make 2020 resolutions ones to look forward to, not dread. When you’re saving money, what you’re actually investing in is freedom.! Ask an American Bank & Trust banker how today.
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