Four Ways To Save Money and Keep Your Finances On Track in the New Year

young man holding credit card and being satisfied, getting out of credit card debt

Did you know that the average American family carries over $150,000 in debt? With the median income topping out around $53,000, you can see how so much debt might be crippling for some. If you are one of the many citizens who have found yourself drowning in debt and just not making enough money to make a dent in the deficit, don't despair. There are ways to climb out of debt, save money, and live comfortably while still enjoying your life. You merely have to start small and work yourself up to a huge savings account by following these simple tips.

1. Freeze Discretionary Spending

If your spending habits are already out of line, getting started with savings can seem like an impossible task. The first step here to save money is to freeze all discretionary spending until you have a chance to sit down and look over what you've been spending your money on. Discretionary spending includes everything from entertainment, to meals out, to clothing purchases. By freezing this spending, even for one month, you will be able to get a better picture of your actual bills, and where your money is going.

Pro Tip: Once you have figured out how much money you are spending, use a budgeting app to set a budget for discretionary categories, like coffee shops and movie dates. The app will alert you when you are nearing your monthly spending budget.

2. Bring Lunch from Home

The average American spends $300 per month eating out. This includes grabbing sandwiches at a local deli or utilizing a workplace cafe for lunchtime meals. To save some cash, consider bringing your lunch with you to work. Not only will you save money, in the long run, but you are likely to eat healthier and more well-balanced meals. If you prefer hot meals for lunch, make extra when you cook dinner and slide the leftovers into a takeout container. This will make it easier for you to grab the leftovers and toss them in your bag before you leave the house.

Pro Tip: Consider making a batch of grilled chicken and hard-boiled eggs on Sunday. These items stay in the fridge and can be used to create a quick but satisfying salad for either lunch or dinner.

3. Avoid Impulse Buys at the Grocery Store By Making a List (and sticking to it)

Going into the grocery store is a necessary evil. After all, you need to stock your home with food, but grocery stores are the perfect place for impulse purchasing. To avoid grabbing items you don't need, make a list of the items you need to stock and stick to that list. Some people take things a step further and plan out each week's meals in advance, then create a list based on the ingredients they will need in order to save money.

Pro Tip: When planning your meals, consider utilizing the same ingredient on multiple evenings. It is cheaper per pound to buy a family-sized package of chicken or beef. By using the same component across various meals, you can save on your weekly food budget.

4. Automate Your Savings

Instead of waiting until the end of the month to put money in savings, experts suggest setting up an automatic transfer for the day you get paid. By moving the money at the beginning of a pay period, you can operate as if it never existed. By automating your savings, you remove the temptation to spend a little extra money because you have it. If the money is gone before you even open your eyes, you can operate as if it never existed.

Pro Tip: Instead of moving your money into a savings account that is linked to your checking account, consider opening an off-site savings account. This will make it harder to access the money and will ensure you are not tempted to dip into your savings unless it is indeed an emergency.

5. Put Your Credit Cards on Ice to Save Money

If you have high balances on your credit cards, put them out of reach, or call the credit card companies and ask them to freeze the account. This is a great way to give yourself an extra push to save money. You can freeze an account and continue to pay down your balance to keep your credit score healthy. By removing the temptation of using cards for purchases, you'll be able to pay down your balance quicker.

Pro Tip: Consider making only small purchases on credit cards and pay off the balance in full each month. You will have more open credit in case of emergency, and a low credit utilization score ensures your credit score stays healthy.