Keep Your Savings Momentum Going Strong

February 11, 2020 by First Federal Bank
KeepSavingsMomentum

Have you started the new year out with an eye on savings? There are few quick fixes, but if you think long term and look for opportunities, you can find many different ways to save some dollars in 2020:

Leverage Holiday Sales

Getting the best deals on everyday necessities and major purchases often comes down to timing. Retailers large and small offer special holiday deals throughout the year on a wide range of products. These sales are a popular time to purchase big ticket items like appliances, even vehicles. But don’t forget about merchandise like clothing, linens, and towels. If saving money is one of your goals for this year, making a note on your calendar for the best days to shop can help you reach your target. The first opportunity is often President’s Day, when prices on furniture and mattresses are typically the lowest all year. From Memorial Day to Labor Day and beyond, opportunities abound for savings throughout the year. Sales can last up to a week surrounding a holiday. Be sure to keep your eye out, and compare sales to find the best prices. Many stores have price matching policies as well. A savvy consumer can always find a way to save!

Buy During Sales Tax Holidays

Florida offers two sales tax holidays each year to help consumers save money. The sales tax in our state is six percent. That may not sound like much, but it can really add up, especially for major purchases. One sales tax holiday is held every year for hurricane preparedness. A number of products, from batteries to generators, are sold without sales tax during a specific time period, as Florida residents prep for hurricane season. The second tax holiday traditionally comes toward the end of the summer and covers school supplies, including computers and clothing. The Florida Legislature is currently considering extending the time periods of these sales tax breaks for state residents, so be sure to tune in to the news for the latest updates. If you follow your elected state officials on social media, they will post about sales tax holidays to keep their constituents up to date.

Include College in Your Savings Plans

Many parents begin thinking about putting away money for higher education as soon as their children are born. Few actually take the necessary steps to save in the early childhood years, however. That can lead to anxiety later on. The good news is, there has never been a better time for Florida residents to create a college fund. In January, Governor Ron DeSantis announced a price reduction for the Florida Prepaid College Plan. The program enables parents to prepay for their children’s education at a guaranteed fixed rate. It is the largest tuition plan in the country. Prices for a new plan in 2020 will be the lowest in five years. And those who are already participating will see either a reduction in their monthly payments, or a refund if they paid a lump sum up front. For more info, check out https://www.myfloridaprepaid.com/.

For our South Carolina customers, saving is easy with the Future Scholar 529 College Savings Plan. A 529 plan is an investment account that offers tax-free earnings growth and tax-free withdrawals when the funds are used to pay for qualified education expenses. College Savings Plans work much like a 401(k) or IRA by investing your after-tax contributions in mutual funds or similar investments. The Future Scholar program for SC residents offers several investment options to choose from, and there are no minimums required to open or contribute to an account. You may enjoy a state tax deduction for your contributions as well. To learn more, visit. https://futurescholar.com/.

Look Ahead to Tax Season

People generally do not look forward to tax time. But it can actually help you save money. In 2019, 73.2% of taxpayers received a refund. The average amount was $2,725. Many people use their refunds to pay down debt, which is an excellent way to secure your finances and set yourself up for savings success. If you have no debt, consider placing your rebate directly into savings, or investing it to let it earn for you. It can be tempting to take a refund and immediately turn around to make a major purchase, often on a luxury item thought to be out of reach. If you do spend the money, putting it toward home improvements is the best choice, as those can lead to long term savings.

Review Your Withholding

It can feel great to receive a check in the mail. But if you rely on a potential refund to help cover everyday expenses, consider adjusting your withholding. Changing your allowances will adjust how much tax is withheld from your paycheck. This could lead to more money in your pocket throughout the year. Be aware, however, that if you do not withhold enough, not only will you not receive a refund, you could end up owing the IRS come Tax Day. With changes to tax codes, there can be opportunities to save. And if there has been a significant change in your life, like a marriage or birth, it is definitely time to look at your W-4. Be sure to consult with your financial advisor about the best way to manage your income taxes.

Building savings is a long game. You need a plan, and to always be looking for the chance to put money away. There are countless opportunities to save. The more you know, the better you can make them work for you!