Tips for Reducing Arm-Crossing Habits in 2021

Entering the new year, many people set goals to save more money and avoid wasteful spending. Photo: Phương Lâm.

In many countries, the cost of fuel, transportation, groceries, and housing is skyrocketing. Despite the efforts of governments and economic organizations, inflation continues to rise in 2022.

According to a survey by market research company Numerator, nearly 60% of respondents said they plan to save more money in 2023. They prioritize this because they are concerned that inflation and economic downturn could affect their finances.

CBS News suggests some ways for people to successfully save money in the new year.

Accumulate from small, regular amounts

Jennifer Streaks, a personal finance reporter for Business Insider, believes that the simplest way to achieve the goal is to automate savings by using apps on mobile phones, and then increase contributions whenever possible.

Additionally, employees can ask their employers to directly deposit a small portion of their salary into a savings account.

“People often think that saving money requires starting with a large amount. However, what is necessary is to establish a habit. Even if only saving 50 USD/month, the fund will increase over time,” advises Streaks.

Accumulating small amounts and gradually increasing savings is the advice of financial experts. Photo: Dany Kurniawan/Pexels.

Track spending

A survey from personal finance website The Ascent shows that 26% of respondents want to save in 2023 to build an emergency fund. Others said they want to save money to make purchases of assets such as TVs or new cars.

According to Streaks, regardless of the reason, creating a budget to manage monthly expenses is the first useful step in building a savings plan.

“Once people see the savings amount increase, they will want to increase their own savings,” she said.

According to Kimberly Palmer of NerdWallet, a small rule is to allocate 50% of income for essential living expenses, 30% for discretionary spending, and save 20% of income.

Reduce debt, avoid excessive spending

Among Americans planning financial solutions this year, 32% said they wanted to reduce debt burden, according to a study by Fidelity Investments. This is accompanied by 39% wanting to save more and 28% trying to spend less.

An advice applicable at any time, but needs to be remembered when prices are high, is to pay off credit card balances each month. By doing so, individuals will avoid paying any interest on unpaid balances.

“People think that keeping a balance in their credit card will improve their credit score, but in reality, it is the opposite. So, try to pay off your balance in full every month,” said Palmer.

According to the 50/20/30 rule, income is divided into 3 main categories, based on basic needs and realities that everyone has encountered in spending. Photo: Tima Miroshnichenko/Pexels.

As the holiday season approaches, Palmer encourages shoppers to spread out their spending goals over several months instead of concentrating all expenses in the last month.

“Budgeting helps people manage their monthly finances more easily. The big risk is overspending. So, arrange things scientifically, and monitor the saving plan,” she said.

Once money has been saved, people should consider options for retaining it. One of the best ways to save money during times of high inflation is to keep it in a high-interest savings account.

Source: Zing