Why I No Longer Make New Year’s Resolutions
In a sea of retirement and other savings-related articles about 2019 New Year’s resolutions, you won’t find one from me. Why? Because I hardly ever keep my resolutions, due to the fact that most require concrete actions, and inertia tends to take hold when I get busy.
So what did I do instead? Whenever I have a bit of time, I focus on improving myself. Since the holiday week tends to be slower from a work perspective, now is the time for that! Here are some of the retirement and other savings-related initiatives that I have undertaken recently:
- Make elective deferrals to my 401(k) plan — I know what you are probably saying, “What? That Mike Webb is a retirement person and doesn’t save to his retirement plan? What a hypocrite!” Okay, so before you rush to judge me, let me provide a bit of context. I started saving to my 401(k) at age 23, and due to that, as well as generous company contributions, and the power of compounding over my 27+ years with the firm, I actually project to have more than enough for retirement. And, as faithful readers of my column know, while I have indeed saved well for retirement, I have not been as successful at saving for other goals in my life. Therefore, a few years ago, I decided to take a break from voluntarily saving for retirement to see if I could improve my savings for other goals (my firm’s retirement plan is not a matching one, so I did not give up the employer contribution by doing so). Having now accomplished this, I am ready to resume retirement saving.
- Signed up for an automatic savings app — While I have been able to save some money voluntarily for purposes other than retirement, it has been a slow grind - especially my general-purpose savings account/emergency fund. I decided that I needed something that would automatically deduct funds from my checking account based on my spending patterns, and place them in an interest-bearing account; much like how a 401(k) contribution automatically comes out of a paycheck. Hopefully, I will have more success with this set-it-and-forget-it option than I have had with something that requires ongoing action on my part. The apps typically have a modest cost, but I think it will be well worth it to automate my savings.
- Enrolled in a financial tracking software program — One thing that I have done for many years is track my spending; which, in turn, lessens my spending (if you don’t do this and don’t believe me, try it sometime). Since then, I have also been budgeting and tracking my net worth. But the practice was a chore, as I manually updated Excel spreadsheets. There are programs out there that will aggregate your net worth, track spending, and help budget. All I needed to do was link my accounts to the program and the software did the rest, updating my figures automatically. Some of these programs are free and others charge a nominal fee. I happened to use a free web-based app to do this, but I suspect that the ones for which you pay would pay for themselves in identifying expense cutting, investing, and savings opportunities.
Listed above are the action items I have initiated in just the last few weeks! Others that I completed this year include:
- Decluttering — I had the pleasure of moving this year and cleaning out two filled-to-the-brim attics and a shed. With this, I decided that enough is enough. I went through all the stuff we had and sold, donated, and/or recycled much of if (an ongoing process). We also decided that if we haven’t used something in six months (one year for seasonal items), it gets added to the decluttering pile. Not only has this reduced expense (we unknowingly purchased duplicates of many household items since we could not find the originals in the clutter), it has also created additional income from selling unused items (one man’s trash is truly another man’s treasure). Of all the initiatives listed here, that has probably been the biggest game-changer in terms of my finances and overall life satisfaction.
- Cutting the cord — I saved more than half on my satellite TV bill by switching to streaming apps. It wasn’t difficult to set up, and by getting rid of what the family didn’t watch and focusing on what we do, I actually have more program choices than I did before.
- Using electronic rebates/coupons and gift card discount apps — Remember sending away for rebates by mail? The rebate apps automate this process by allowing you to scan your receipts for instant rebates, and receive cash back from websites where you make internet purchases. The coupon apps (which are often part of a rebate app as well) work the same way, scanning the internet for the best electronic coupons and other deals. The greatest part is that I earn money back on items that I would normally buy anyway! The gift card apps allow you to “double dip” on savings, by paying for your discounted internet purchases with an electronic gift card you also purchased at a discount. Using discounted gift cards works at brick-and-mortar stores as well. There are apps that specialize in physical shopping, although the process is a bit less efficient than via the internet. Thus, if you are paying full price for most things you need nowadays, you’re probably doing it wrong!
Of course, this is far from an exhaustive list of everything people can do to improve their finances, but it certainly has been an excellent start for me! If I try other things, I will update you in this space. But for now, you might want to share all/some of these initiatives with others who can benefit—like your employees for those retirement plan sponsors out there!
Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice. Opinions expressed are those of the author, and do not necessarily represent the opinions of Cammack Retirement Group.
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