Daily, Monthly and Long-Term Tips for Saving Money in 2020

Research shows it takes roughly 21 days to form a habit. If one of your goals is to develop and stick with better money habits in the new year, outlining both a short and long-term plan to help you get to that Day 21 (and beyond!) is essential to your success. Our Wealth Management & Trust Team is here with practical advice for saving money in 2020 -- highlighting how seemingly small first steps can, over time, lead to major positive financial change.

Daily, Monthly, and Long-Term Tips for Saving Money in 2020

As we embark on a new year, many Americans will find themselves making bold resolutions to initiate positive change in their lives. According to the website Statista, the five most common New Year’s resolutions for 2019 were:

1. Eat healthier
2. Exercise more
3. Lose weight
4. Save more money
5. Learn a new skill

As a financial advisor at Frontier Bank Wealth Management & Trust, I can’t offer much advice on 1-3 and 5, but I CAN offer a few tips to help you succeed in making those big sweeping changes to your finances. Here are a few suggestions to help you on a daily, monthly, and long-term basis.

Daily
My number one suggestion to anyone who approaches me on how to get their finances in order is to educate yourself. When my wife graduated college, she was gifted Dave Ramsey’s bestselling book The Total Money Makeover, and I immediately stole it and read it myself. I’m not at all exaggerating when I state that his book taught me more at age 22 about personal finance than all my previous years of education combined. It is a simple and often entertaining read that will help you understand the value of budgeting, paying off your debt, and spending less than you make.

Many in the finance industry are quick to dismiss Ramsey’s advice as simplistic, which is a mistake in my opinion. I’ve recommended this book to many people and I firmly believe, as someone who has personally benefited from his advice, if you are willing to take this first step and educate yourself, you will find yourself on the right path to financial success.

Monthly
Congratulations, you’ve made it to the second month! Pat yourself on the back because research tells us that roughly 80% of people give up on their resolutions by the second week of February. If you took my advice and educated yourself, you now understand what daily habits you should be doing to improve your savings.

Now we get into the grind of determining a budget at the beginning of each month. Don’t overthink this and make it more complicated than it need be. The true value of a monthly budget is first, to help you identify where your money is going and force yourself to pay attention to the little purchases that add up to a big expense by the end of the month. The second is to help you pay off any debt that is standing in your way to fully take advantage of the most powerful force in the Universe, compound interest!

Long Term
This is where the fun really begins. As you become debt free, you now have more disposable income to save and invest. If you’re fortunate enough to have an employer who provides a retirement plan with matching funds, begin by doing at least the minimum amount to get the matching funds from your employer. Once you’ve taken that step, I would recommend sitting down with a fee only fiduciary financial advisor to help you plan your financial future. Someone who’s not going to get paid a commission based on what investments they can sell you but someone who has a legal obligation to advise you based on your best interests. There are many good advisors out there and at Frontier Bank Wealth Management & Trust, we pride ourselves on taking the time to develop a plan with you to ensure that in January 2021 you can move on to one of those other tricky resolutions.

Brad Lupkes
Wealth Advisor
bradl@frontierbk.com
712-472-2538