I believe that if you fail to plan, you plan to fail. This is why I am such a penny pincher. I save for my retirement, I save to live well and I save because it suits my personality. All the same, I am always on the lookout for ways to save more, especially before the holiday season rains down upon me. So to help me, I find six ways to save more before I close the curtain on 2012.
I save a higher percentage of my income year round. According to the Employee Benefit Research Institute, most people only contribute 7.5 percent of their income to their retirement accounts. However, I allocate 15 percent of my gross income to my retirement accounts, and another 10 percent to generic savings accounts.
I bulked up my contributions. I maxed out my contributions to my 401(k) in August ($17,000). And now that my contributions for that account are maxed out, I am putting a maniacal focus on my Roth IRA. Since I can contribute $5,500 a year to that account, I'm loading it every chance I get -- with every bonus payment I receive. So far, I'm on track to have that account maxed out by the end of November.
I opened an after-tax savings account. Even though savings account rates are less than optimal (in my mind), I still have one, and I contribute five percent of my total gross income to that each month, and the other five percent goes into a 12-year CD.
I use special savings accounts. As a freelancer and small business owner, my income is unpredictable. However, during months of feast, I make sure I allocate money to a savings account in my daughters names -- the IRS allows me to gift up to $10,000 tax free each year to my offspring. This way, I cut my tax liability and maximize my savings, through a taxation loophole, and my kids never have to worry about money for college.
I set aside money for taxes. Because I own two businesses and because I am a freelancer, I have to pay my dues to Uncle Sam each quarter. As opposed to shoving cash under my mattress, I rotate money into a 3-month CD and then pull it out at maturation to take care of my tax bill. This way, I keep everything on the up and up, and earn interest on my money that I can save elsewhere.
I lowered my investment fees. Expenses used to take a sizeable chunk out of investment returns. My fees ranged from 0.1 to 2 percent of my total investments, annually -- and that adds up. I met with my financial planner and found out about several various fund options, including one that clearly had the lowest fees (index funds). Now, my portfolio is diverse and almost completely fee free.
*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.
More from this contributor:
- Banking & Budgeting
- savings accounts