It’s the new year and it’s time to put financial resolutions in motion for many people. And for those who chose to be frugal — that is living modestly, saving money and making conscious financial decisions — these resolutions can prove very effective, very rapidly.
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“Embarking on a New Year isn’t just a flip of the calendar for those who truly embrace financial liberation,” said Dutch Mendenhall, the CEO of RAD Companies.
“It’s a launchpad to weaving prosperity into the fabric of their lives. Smart and frugal individuals orchestrate key strategic money moves at the dawn of a fresh year — moves that reflect their personality, interests and values.”
Living frugally doesn’t mean depriving yourself; it means making deliberate and calculated financial decisions and trying to save money in as many ways as one can, experts said.
Take Care of Post-Holiday Shopping Tasks
That means returning any items that need to be returned, making appropriate exchanges or getting the right credits, said Tanya Peterson, vice president of brand at Achieve.
“It also means using, or making plans to use, any gift cards. Many people receive gift cards at the holiday and forget they have them — or use them only partially,” she said.
Smart, frugal consumers are often ready to take advantage of after-Christmas sales, which may include purchasing holiday decorations and other items for next year.
“But it also is an excellent time to find great deals on gifts you’ll know you’ll need to purchase throughout the year. That requires some advance planning to list out recipients, occasions — birthdays, weddings, graduations — and ideas,” added Peterson.
For instance, Diana Howard, financial analyst at CouponBirds, said that now is the time to “shop smart” as retailers offer big discounts on various items.
“Many retailers hold white sales in January, offering 40%-70% discounts on soft home goods. Furniture also sees its highest discount of the year at 20%,” she said.
Winter clothing is another example, as consumers can enjoy a 75% discount or more on coats and jackets in the first few months of the year, Howard added.
According to Peterson, frugal individuals will likely already have a budget, but the start of the year is the ideal time to refresh it or create a new one.
“The past few years have wreaked havoc on many budgets, so taking a fresh look at assets, liabilities and revenues is important,” she said, adding that frugal people will also evaluate and update their goals, which may include everything from a summer vacation trip to a new appliance to retirement, and get the budget in line with those goals.
RAD’s Mendenhall echoed the sentiment, saying that frugal strategists don’t merely glance at their budgets — they conduct a personal audit of their financial plan.
“They revisit, reshape and reallocate where every dollar goes and how every penny has purpose,” he said. “For instance, instead of cursory budget adjustments, envision a budget makeover. Identify unnecessary expenses, redirect funds toward investments and nurture your financial growth systematically.”
Plan for 2024 Healthcare Costs
Individuals who have a health savings account (HSA) should fund it as soon as possible or plan how they will fully fund it over the year.
Meanwhile, for those with a flexible spending account (FSA), Peterson said they should check any balances, make sure they know the date by which they must use the funds and plan out their use as much as possible.
“That may mean scheduling appointments and procedures early in the year and arranging for any day-care and elder-care expenses,” she added.
Plan for Tax Season
According to Peterson, frugal people will start the year making sure their tax documents are in order and get plans in place now for filing their returns.
“If working with a tax professional or tax preparation software, it’s possible to check now and be prepared for any tax payments you will have,” said Peterson. “You can also go to IRS.gov and download tax forms to get a general idea of what, if anything, you will owe.”
Pay Off Your Debt
Erika Kullberg, founder of Erika.com, said that frugal people know that one of the best ways to save money is to pay off debt faster than planned, that way, they can save on interest.
“Take any holiday bonuses, cash gifts or any other extra money you can afford to part with and pay off as much debt as you can to help avoid paying more interest than you need to,” she added.
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This article originally appeared on GOBankingRates.com: 6 Things Frugal People Always Do at the Start of a New Year
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