Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

5 Easy Ways to Save Money in 2020

By Maurie Backman - Dec 4, 2019 at 6:18AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Boost your savings in the new year with these tips.

With the new year being right around the corner, many people will no doubt start making their lists of financial resolutions. And chances are, "save more money" will be one of yours. If you're eager to come out ahead savings-wise in 2020, here are a few easy ways to get there.

1. Follow a budget

You might think budgeting is complicated, but actually, it's one of the simplest money management tactics you can employ. All you need to do to create a budget is list your recurring monthly expenses, factor in sporadic expenses that pop up during the year, like quarterly property tax payments or annual membership renewals, and compare your total spending to your total earnings. If you're not left with room left over for savings, you simply go back through your expense categories and decide which to trim. Easy!

Pile of 100-dollar bills

IMAGE SOURCE: GETTY IMAGES.

2. Bank your raise

It's hard to part with money you're used to spending. But the beauty of getting a raise is that it's more money than you've had coming in before. Therefore, if you score a raise at work, you should have no problem earmarking it for savings rather than spending it.

3. Put your efforts on autopilot

Saving money gets a lot easier when you take human error -- or a lack of willpower -- out of the equation. Automating your savings effectively forces you to add money to your bank or retirement account on a regular basis, and once you start doing it, you'll stop missing that cash. You can arrange, through your bank, to have a portion of each paycheck go directly from checking to savings, or sign up for your employer's 401(k) and have a chunk of your earnings allocated to retirement off the bat. Some IRAs have an automatic transfer feature, too, so consider that if you don't have access to a 401(k).

4. Pay off costly credit card debt

The longer you carry a credit card balance, the more money you throw away on interest. If you want to boost your savings next year, stop giving your money away to credit card companies, and instead start keeping it for yourself. If you pay down a chunk of your existing debt, you'll do just that.

5. Eke out extra savings from the IRS

There are immediate tax benefits to funding a traditional IRA, 401(k), or health savings account (HSA). The money you put into any of these accounts is made with pre-tax dollars, and your associated savings are a function of the tax bracket you fall into. If you save, say, $3,000, in any of these accounts next year, and you're in the 24% tax bracket, that's $720 in instant savings for you to enjoy. IRAs and 401(k)s come in traditional and Roth varieties, and while Roth accounts offer their own tax-related perks, you won't get that immediate tax break, so keep that in mind when deciding which type of retirement plan to save in. HSAs, meanwhile, are always funded with pre-tax dollars, so you get that instant savings any time you contribute to one.

If you're intent on saving more money in 2020, know that it doesn't have to be a painful endeavor. Keep at it, and with any luck, you'll close out the year much richer than you started out.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
652%
 
S&P 500 Returns
145%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/09/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.