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5 practical money tips for the new year

As you approach 2016, you might be considering how to better manage your money. It's a common goal to spend less and save more, but that's easier said than done. Here's how to break your financial goals down into achievable chunks. 1. Think big. ...

Bruce Helmer and Peg Webb, financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on KLKS 100.1 FM on Sunday mornings.
Bruce Helmer and Peg Webb, financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on KLKS 100.1 FM on Sunday mornings.

As you approach 2016, you might be considering how to better manage your money.

It's a common goal to spend less and save more, but that's easier said than done. Here's how to

break your financial goals down into achievable chunks.

1. Think big. Sometimes people think that focusing on small ways to save money-like choosing no-name labels vs. brand names at the supermarket-will add up to big bucks. It's true that it'll save some money, but it likely won't amount to much. We suggest devoting your attention to reducing big-ticket monthly expenses. For example, if you've built up equity in your home, you could potentially refinance your mortgage to pay less each month. You could also work with an insurance specialist to determine if your homeowners, auto and/or life insurance

premiums could be lower.

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2. Resist lifestyle inflation. If you followed through on No. 1, or if you're due for a promotion or bonus in the New Year, you might be seeing hundreds (or even thousands!) of dollars in extra income. It's OK to indulge yourself to a certain extent, but it's similarly important to keep the big picture in mind (see No. 3). If you don't do anything with the savings you've sought, you may be tempted to spend that money on things that don't really get you closer to your values and goals.

3. Decide what you're saving for. No one wants to save for the sake of saving. If you don't have a specific goal in mind, you might be more susceptible to lifestyle inflation than you otherwise would be.

Let your values guide your goal-setting: If you value security, perhaps your goal is to save as much as possible for retirement. If you value family and education, then you may want to build up a college savings fund for your children or grandchildren.

4. Put your savings in the right place(s). Not all savings vehicles are created equal; certain accounts are best used for certain purposes. That's why it's important to be very clear about the end goals for your money. For example, if you're saving for retirement, a wise option may be to put some of your savings in an employer-sponsored plan, like a 401k, or an IRA. If you're saving for your children's college fund, however, a 529 plan may be a route you want to consider.

The account type matters because there are penalties applied to withdrawals not used for the account's primary purpose. These restrictions help keep you on the path to greater savings.

5. Repeat on a monthly basis. Dedicate extra time to perusing other major monthly expenses, such as cable/Internet and cell phone bills, to see how else you could be saving bucks. Sometimes it's as simple as calling your provider and asking if there's a better plan given your habits and usage.

With discipline, foresight and a commitment to your long-term goals, saving may become a reward in its own right. Cheers to a potentially wealthier 2016.

Prior to investing in a 529 plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax adviser before investing.

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Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of "Your Money" on KLKS 100.1 FM on Sunday mornings. Email Bruce and Peg at yourmoney@wealthenhancement.com .

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