If you're looking for ways to grow your nest egg this year, you're not alone. Overwhelmingly, Americans are worrying more about their financial security. Do you have a plan in place to kick-start your savings? Here are 11 ways you can get yourself on solid financial footing and stash away more money for the future.
No. 1: Getting into balance
Budgeting may not be a favorite on your to-do list, but it's necessary if you want to see where extra dollars may be lurking. The Motley Fool provides some great budgeting tips here (spoiler alert -- it's all about making budgeting super-simple), but to get you started, I recommend looking at about three months of your spending. That way, it's easier to smooth out unexpected expenses and get a clearer picture of what you're spending your money on.
Why bother? You might be surprised just how much your wasting on things you simply don't need.
No. 2: Paying yourself first
Most people save what's left over after their done spending every month. Instead, flip that strategy upside down.
Set a goal for your savings this year, divide that amount by 12, and then save that money every month, before doling out cash on anything else. It's pretty amazing how resourceful you can get with your spending once you've embraced a savings-first approach.
No. 3: Making it automatic
If you work for a large company that offers a retirement plan, such as a 401(k), then that plan could be the best savings vehicle to help keep you from cheating on your savings-first strategy.
Many plans allow you to change your contribution rate at any point, so rather than divide your annual savings goal by 12, divide it by the number of paychecks you get every year, and then sit down with human resources to make the necessary changes.
Also, while you're at it, see if your plan offers an auto-escalation feature. Most Americans contribute less than 7% of their income to their 401(k) plan, and that's not likely going to be enough. An auto-escalation plan increases your contribution rate by a fixed percentage every year, and even if you only increase your contribution rate by a budget-friendly 1% or 2% per year, those additional savings can really add up. Furthermore, since 401(k) contributions are made with pre-tax dollars, putting contribution rate increases on autopilot can save you money at tax time too.
No. 4: Managing your investment expenses
Speaking of your investments, you might be short-changing your savings if you're investing in expensive mutual funds, rather than individual stocks or ETFs.
If your investment expenses are costing you more than 1% per year, but your performance over the past five years mirrors that of the S&P 500 index, you might be better off ditching your current investment for a cheap S&P 500 index ETF. For example, Vanguard claims that its S&P 500 ETF 's(NYSEMKT: VOO) 0.05% expense ratio is 95% less than its peers.
No. 5: Conquering credit scores
You might not know it, but if your credit score isn't top notch, you're probably forking out more every month in interest than you need to.
Lenders love high credit scores, and they offer borrowers who have them some of their best money-saving deals. These deals can translate into thousands of dollars in savings on home loans, auto loans, and credit cards. How high should you aim? Target a score north of 760 for top-tier treatment. How can you get there? Take a look at your utilization of credit cards. While there's no hard and fast rule, you're likely to get your score higher if you're using less than 30% of your available credit. If you get can your utilization even lower than that, that's even better.
Not sure what your score is? Credit Karma offers a free online tool that will show you your score and help you keep track of it as it improves.
No. 6: What's old is new
Wondering why that old refrigerator at the family camp still works when you've replaced your own fridge three times in the past decade? Sometimes, older is better, and oftentimes it's cheaper.
Swap shops and thrift stores are wonderful sources for a variety of goods, and items can cost a fraction of the cost of buying new. You might be amazed what you can get for less, and you might end up having some fun bargain-hunting at the same time.
Where to start? See if your town's transfer station offers a swap shop where neighbors can exchange goods with each other for free. If not, start one!
No. 7: Spending more mindfully
If you find yourself donating a lot of goods to charity every year, or finding yourself owning a lot of little-used items, you might benefit from doing a bit of math when you're shopping. For instance, I divide every potential purchase by the cost of my daily iced coffee. If I'm on the fence over a $100 purchase, I simply ask myself, "is that worth 50 iced coffees?" Often, the answer is no.
No. 8: Negotiating is worth it
Some people hate haggling, but the savings that can come with negotiating can be meaningful, especially when dealing with small-business owners, and big purchases. Once, I saved more than $200 on transmission work simply by asking if the mechanic offered a cash price.
Obviously, not everything can be negotiated, but many times I've found that you can negotiate on a variety of things, including insurance, cable television, and, of course, cars. To negotiate successfully, spend some time online researching costs, and make some phone calls to find out what competitors charge. Buying a new car? Consider a site like TrueCar, which provides insight into what other people have paid. Buying an old car? Visit KBB.com to see what the car is really worth.
No. 9: Getting flexible
Flex-spending accounts provide another way to spend more wisely and lower your tax bill. If you spend money every year on healthcare costs or dependent care, contributing pre-tax money to a FSA directly from your paycheck can smooth out your spending and reduce your taxable income. In 2017, up to $2,600 can be contributed to an FSA to use for healthcare expenses, and as long as that money is used for qualified expenses, such as your dependent's braces, you may never end up being taxed on that money.
The catch? FSAs are use-it or lose-it plans, which means you need to make sure you don't contribute more to one than you think you'll need.
No. 10: Catching yourself up
If you're 50 or older and your savings could use a boost, don't forget that the IRS allows you to make an extra $1,000 catch-up contribution to your IRA. In 2017, $5,500 can be contributed to either a traditional or Roth IRA as a base contribution, so including this additional $1,000 catch-up amount, you can contribute up to $6,500 to an IRA this year.
No. 11: Considering the whole cost
If you're buying the same items over and over again, it could be time to shift your focus from paying less up front, to paying less over time. High-quality items, and warranties that protect you from defects or damage, may be pricier in the short term, but they can save you big money over the long haul.
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Todd Campbell has no position in any stocks mentioned.Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned.
The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.