New Year’s Resolution, Save More Money

This time of year most of us think about New Year's resolutions, including promises to manage finances better and to possibly sock away more money. Did you have the same resolution last year for 2014? How did you make out with resolutions in 2014?

There are many reasons to save for the future including saving for retirement, an emergency fund, saving for kids' college educations, saving for a vacation or a vacation home. Unfortunately, the average American hasn't saved enough money for retirement despite the fact that there are mechanisms in place to help the average person save.

Retirement plans such as 401k plans, IRA plans, SEP plans and several others all have tax benefits that will help you save more money. Many employers also encourage their employees to save money by matching employee contributions to retirement accounts. You're getting free money from your employer - why not take advantage of free money being offered to you?

Each month the government publishes Personal Income and Outlays. For the month of November, the personal savings rate was 4.4 percent (not to be confused with savings account rates) as Americans saved $576.5 billion. Did you at least save 4.4 percent of your income in November?

Whether or not you save any money for your future is entirely up to you. Most people pay bills first and hope to have some money left to save but usually don't. There is definitely something to be said for the old adjective "pay yourself first." Put aside a percentage of your income - why not start out with 4.4 percent? One good recommendation is to start off with a small deduction and increase it by 1% each month until you've reached your optimal savings goal.