Five Ways to Save Money in the New Year

Get out of debt and pad your savings account with these tips.

Each year, untold numbers of Americans make it their New Year’s resolution to get out of debt and save money. According to Time magazine, however, that’s also one of the most common resolutions to break. No worries. If the first month into the New Year you’ve already gone shopping, eaten out too much or neglected to pay off the debt you accrued during the holidays, don’t give up. The tips below will help you keep your goal of saving money this year.

Skip Name Brands: Store brand items are typically equally as effective as the name brand ones. According to About.com’s Frugal Living site, making this move will help you slash 25 to 50 percent off of your weekly grocery bill. Given that many grocery stores are even creating lines of organic and other high-end items, shopping exclusively for store brand products won’t be the big sacrifice that you think it is.

Go Energy Efficient: If you need to purchase a major appliance this year, such as a refrigerator, washing machine or dish washer, make sure you purchase the most energy efficient appliances available. It will not only lower your monthly utility bill, in many regions it will also qualify you for a rebate on the purchase.

Ask For a Raise: Sure, the economy is still rebounding from the recession, but it can’t hurt to ask for a raise if you feel that you qualify for one. If your request is approved, you can put the extra money in a savings account or use it to pay off credit card debt. If you’re a city or state employee and can’t ask for a raise because of government budget problems, see if there’s another way to move up the pay scale, like taking a class to earn more salary points.

Give Yourself an Allowance: Make a budget and figure out what money you can use for discretionary spending each week or month. If you determine that amount is $400 each month, for example, withdraw that amount of cash from your bank account. Use it to go to the movies, buy clothes or go out to dinner. But once you run out of that amount of cash, that’s it. Forbid yourself from spending more money on entertainment, shopping and other nonessential needs.

Pay Yourself: When you budget, it’s a no-brainer that you must set aside money for your non-negotiables, such as rent, mortgage, student or car loans. If you want to save money, however, it’s also crucial to pay yourself. Try to save 5 to 10 percent of your income each month. You can have your bank automatically deduct that amount from your checking account and transfer it into savings. After the first few transfers, you likely won’t even notice that this money is missing from checking.

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