Boylan: Practical tips to save money in 2015

Daniel Boylan

Most of us make New Year’s resolutions that are honest, well meaning and optimistic. And most of us give up on them after a few short weeks.

The main reason we fail is simple: we didn’t create a plan to succeed.

While losing weight and becoming a better person are often popular resolutions, the one that matters most is saving money. Saving isn’t about simply putting money in the bank; It is the ability to examine your wants and needs, then taking time to prioritize them.

The first step is coming up with a household budget that addresses your ability to pay the bills, save for the future and, most importantly, reduce and/or restrict unnecessary purchases.

Once you’ve come up with a household budget, review your spending habits over the last few months.

The goal for reserving money for later is making the best use of the money you have now as you apply it toward high-priority investments for the future. These include:

■Maximizing your 401(k) or 403(b) deduction and collecting the free match from your employer.

■Hiding money from yourself by utilizing a separate bank account at another financial institution.

■Increasing your tax withholding, which will increase your tax refund.

■Saving for a child’s education with a College Savings program or 529 plan.

■Stashing extra cash at the end of every pay cycle.

Reducing the cost of items you buy can be accomplished by:

■Paying extra on the mortgage each month.

■Wiping out credit card debt by paying down balances.

■Buying store brand rather than name brand.

■Using discount websites and eBay.com for your purchases.

■Making your home more energy efficient by weatherproofing it.

It may be difficult for many of us, but we can save a great deal of money by not buying unnecessary items. Ways to accomplish this include:

■Kicking bad habits (such as smoking or fast food).

■Utilizing free resources, such as the park, library or community concerts.

Picking up even a few of these techniques and sticking with them will help you create good financial habits. In turn, as you incorporate all of them, you'll develop a better savings pattern that will increase your confidence and create optimism for your future.

Daniel Boylan is a finance instructor in the Miller College of Business at Ball State University.