5 reasons to save more money in 2015
January 27, 2015
It seems you cannot read a personal finance article today without someone nagging you to save more. That advice may seem somewhat generic, but as 2015 gets underway, there are several specific reasons why you should save more money in 2015 than you did last year.
Here are five of them.
1. Gas prices are down
The recent plunge in gas prices should be putting money directly into your pocket if you drive a car. According to the U.S. Energy Information Administration, by the first week of January the price of a gallon of gas was down by about $1.12 from a year earlier.
If you average 200 miles a week and get 25 miles to the gallon, that should save you more than $450 over the course of the year. However, those savings at the pump only really count if people transfer them from their wallets to their savings accounts.
2. Employment is up
2014 was the 21st century's best year yet for job growth. In the process, the unemployment rate was pushed down from 6.7 percent to 5.6 percent. This does not just mean that there is a better chance that you have a job in 2015. As the unemployment rate approaches 5 percent, expect to see more upward pressure on wages. When workers are in demand, they have more bargaining power with their current employers, and more opportunities to seek better wages in the job market.
The bottom line is that after years of tepid wage growth, you may be in line for a better raise in 2015. You could do your future a favor if you save some of that extra money rather than simply spending it.
3. Refinancing remains an option
Thirty-year mortgage rates ended 2014 more than half a percentage point lower than they ended 2013. What makes current mortgage rates even more attractive is that home prices have been rising since March 2012, bringing more loans out from under water and thus eligible for refinancing.
If you have not refinanced your mortgage yet, this could be an opportunity to put more money in your pocket -- and ultimately into savings -- every month for years to come.
4. Savings account rates are still near zero
While the above three items are good news, this is the bad news. At these rates, savings accounts are not going to grow themselves, so you need to pick up the slack by saving more.
5. Face it: You are another year older
Every year you delay saving, the harder it gets. You are now a year closer to retirement than you were at this point in 2014, so make 2015 the year you stop procrastinating and start saving.
Taken together, these factors make 2015 an excellent time to start a more serious savings effort. Think about it: If you do not start saving more under these conditions, you probably never will -- and that would make for a pretty bleak future.
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