Given the inflationary hellscape of 2022, it’s no surprise that saving money is one of the most popular New Year’s resolutions among Americans heading into 2023.
Americans are their shrinking purchasing power The cost of everyday items such as gasoline, travel, groceries and housing has skyrocketed this year. Despite continued efforts by the Federal Reserve to curb inflation, inflation continued to rise monthly throughout 2022, with prices peaking in the summer and then gradually declining. in November.
Nearly 60% of respondents said they plan to save more money in the next year, according to a survey by technology market research firm Numerator. Respondents say they are prioritizing savings because they are concerned about the impact of inflation and a possible recession on their wallets.
But like any resolution, the challenge sticks with it. Here are some tips to help you reach your 2023 savings goals.
Start small but be consistent
Streak said the easiest way to reach your goal of saving money is probably to automate your savings and donate more whenever possible.
Using smartphone apps like Acorns and Chime is one way to automate your savings. Consumers can also ask their employer to deposit part of their salary directly into a savings account.
“People really think they have to start with these big funds to save money,” says Streaks. “What you want to do is set a habit. Even if it’s $50 a month, it adds up over time.”
According to a survey by The Ascent, a personal finance website, 26% of respondents want to save to build an emergency fund in 2023. Others surveyed say they want to keep cash for big purchases like a new TV or car.
Whatever the reason, setting a budget and seeing where your money goes each month is a good first step to creating a savings plan, says Jennifer Streaks, Business Insider’s senior personal finance reporter at CBS. told the news. “When you see your money grow, you want to increase your savings,” she said.
According to NerdWallet’s Kimberly Palmer, a good rule of thumb is to allocate 50% of your paycheck to everyday needs, 30% to disposable items, and 20% of your income to waste.
Reduce debt, don’t overspend
Thirty-two percent of Americans planning a financial settlement this year said they would. reduce their debt According to a Fidelity Investments study, the survey found that it goes hand in hand with 39% saying they want to save more and 28% saying they want to spend less.
one applicable advice But it’s especially important to keep this in mind when prices are skyrocketing and the Federal Reserve is raising rates. pay the credit card balance monthly. That way, you won’t have to pay interest on the outstanding balance.
“People think that maintaining a credit card balance will improve their credit score, but it’s the opposite,” says Palmer. “So I’d like to try to pay off the balance each month.”
And as the holidays approach, Palmer encourages shoppers to spread their spending over several months instead of focusing all their spending in December.
“It actually helps spread your spending as a consumer. It saves you money on your monthly budget,” she said. Stick with it, buy a gift for someone and that’s it, you don’t have to buy another.”
Once you have saved your money, consider where to store it.one best way to save money Includes storing money during high inflation high yield savings account.