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Lloyd: Seven tips for achieving 2020 savings goals

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As 2019 comes to a close, and the calendar turns to a new decade, many are taking a moment to evaluate their financial goals.

Is 2020 the year to get out of debt, buy a house, plan that once in a lifetime trip, or just build up a rainy-day fund?

Most people know the importance of saving, but some may find it challenging to know where to start or how to create a savings plan to achieve these goals.

The new year is a perfect time to kick-start a savings plan to help reach financial goals. Folks typically find that by creating a savings plan early, it can help achieve other resolutions. For instance, dining out less can positively impact one’s wallet and waistline, translating to both health and financial goals.

When creating a savings plan, it’s important to keep the 50/20/30 rule in mind, which suggests putting 50 percent of income toward necessities, 20 percent toward paying off debt or for savings, and 30 percent for “fun” money.

In addition to appropriately allocating income, there are several other tips and tricks to consider in reaching 2020 savings goals:

  1. Avoid peak season for big purchases - Try to time purchases during the off-season. This can mean buying a winter coat in April when it goes on sale, visiting Italy in November, or maybe even starting Christmas shopping in July.
  2.  Review automatic subscriptions and payments - Look at recurring or automatically enrolled payments, and cut any streaming services, gym memberships, or delivery plans you don’t use. It also wouldn’t hurt to nix a few you do use, but don’t need.
  3. Review the small purchases (that add up) – Those daily latte purchases can add up to be more than $1,100 a year. Consider cutting back on non-essential, expensive food and drinks. Instead, commit to making coffee at home or packing lunch.
  4. Pay down high interest credit cards - Whenever possible, pay more than the monthly minimum balance, focusing first on the cards with the highest interest. Once these payments are back on track, resist adding to that balance going forward. Some cards also offer balance transfers at lower interest rates but be wary of sneaky fees.
  5. Be economical when eating out - When going out to eat, try to limit the items ordered to just an entrée, and steer clear of buying multiple drinks or appetizers. This strategy will not only save money but cut down on caloric intake as well – a win-win!
  6. Consider disputing your property assessment - Studies have found that county assessors can over assess the value of a home, increasing the amount owed on taxes each year. If you think the home value wasn’t properly assessed, consider petitioning the town’s tax assessor for a revaluation.
  7. Refinance your mortgage - Interest rates are still relatively low, so consider refinancing your mortgage before interest rates continue to rise even further. Just make sure to factor in any accompanying fees and expenses that could accumulate with a refinance transaction.

The best time to start saving is now, so let the new decade be the launch of productive behaviors. Making simple changes can help form long-lasting habits that ultimately lead to a balanced budget and achieving broader goals.

For more money saving tips, visit efirstbankblog.com/.

Editor’s Note: Bryce Lloyd is Phoenix market president for FirstBank.