5 Tips to Make the Most of Your New Year’s Savings Plan

If you’re thinking, “How should I save money,” first realize it’s not all about the money. Feeling the need to update financial goals in 2023 and executing on that need are two very different things. Clearly, something has you rattled if you’re reading this, so use that shaky feeling (aka intuition) to get ahead of further issues.

Start by fully committing to the “why” of your money resolutions. Maybe you have a big purchase planned. You may want to pay off student debt because that monthly number gets you down. Or maybe you’re living paycheck to paycheck and have had enough. (Did you know 40% of women have less than $100 in their savings accounts? ¹  You aren’t alone.) Take a deep breath, center yourself, and lean into the rest of these tips. 

Getting real about your money goals in 2023 starts with laying out your budget. Don’t push it off. With a budget, you’ll always know how much you have to spend — and not spend. And, as with a diet, if you indulge in one thing, you’ll know you need to cut back on another.

Start with what you have. In the era of side gigs, your income may be a bunch of smaller jobs that add up. You might have a traditional salary. Maybe you have both. Do you have a partner? He/she/they can contribute to the asset side, too.

What comes next? Look at debits and debts. Look at monthly expenses. These are usually the easiest to track. Rent, gas and electric, groceries, gas for the car or a pass for the bus or subway. Don’t forget to add the bills that come at six-month and 12-month intervals. (We’re looking at you, car insurance.)

Then start to itemize the “surprise” daily costs of living. Happy hours, birthday gifts, dry cleaning, personal-care products (FYI, in general, women pay more for skin products, hair products, razors and deodorant than men²). Regular mani-pedis, monthly pet grooming (and new squeaky toys) add up. And how they add up over the length of a year can derail the best laid plans.

You don’t have to look at it as “cutting out.” Consider the idea of “extensions”. Extend the length of time between appointments that fall on a calendar. Five weeks for that trim instead of four. Six weeks for the dog grooming. Extend your drinks at happy hour by drinking water between each alcoholic drink. Your debit account will thank you today (and your head will thank you tomorrow morning).  

With unplanned purchases, consider the difference between “I need it” and “I want it.” Defer the “I wants” to a time when you’re not focused on the new year’s savings plan. Remember: This isn’t forever; it’s until you reach your goal.

Start thinking about and gathering what you need based on what we talked about in Tip #2. Then, let interactive tools and guides help you do the rest.

Try both our Budget Calculator and Savings Goal Calculator and let the power of online tools help you budget and save.

Let’s go back to your goal. The more concrete it is, the easier it will be to save. If you really, really want something, you can always find a way, right? Start small and move forward. A yearly Netflix subscription is cheaper (and you get more) than going to two movies a month for a year, so choose the subscription. If you have to replace a broken can opener, buying a cheaper version while you’re focused on saving is smarter than buying the bougie one.

And that’s an important point: This particular savings plan isn’t forever. You’ll achieve your goal and you’ll set another. And then another. And the ways you meet them will adapt as your income grows and your circumstances change.

Taking the long view is an art, but women need to because they’re still paid 17% less than men,³ and taking a break from working to raise a child or care for a sick parent can sucker-punch their financial independence. They also live longer than men, on average, and have to plan for a longer retirement. You might not be ready to focus on that goal yet, but what you do today protects your financial longevity down the road. That’s the long view.

Recent times financially have been more than a little scary. Of course you worry when both your national and local news are screaming about inflation. But when people worry, they often get stuck in place and lose out on opportunities. You need to maximize your savings. Here are some simple ways to get un-stuck.

One of your best bets? Automate your savings. Direct deposit from your employer can usually be split up between multiple accounts. Since you’ve done the budgeting work (or will, right?), you know what you need to get through a month. Put the rest in a savings account and leave it alone.

If you have multiple goals, consider multiple savings accounts — one account per goal. It’s easier to see how you’re getting to each if you separate them out. No direct deposit? You can still open the multiple savings accounts and split up your check yourself to meet your goals. Living in the gig economy? Direct the money from each gig to different accounts. Check first, though, to make sure your bank’s savings accounts are free.

Choose high-interest savings accounts. Your money needs to make the most money it can and it won’t in a 0% account.

Use cash-back credit cards. What’s not to like about getting dollars back for purchases? But instead of using the cash to buy more stuff, funnel it into those savings accounts and amplify the save. And it’s important to pay those off monthly in full when they’re due to avoid finance charges.

Never spend the windfall. People getting tax refunds often spend them. Stop. Save them! Those chunks of change can dramatically increase that savings plan of yours and give your confidence a boost with clear proof that you’re on track to meet your goal.