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Increase savings in 2013

By Jeff Fruhwirth · Bankrate.com
Wednesday, December 26, 2012
Posted: 12 pm ET

Last week, we talked about how to cut down on your bills in 2013. Please go back and take a look if you missed it. This week, we are going to talk about simple ways to increase savings in the new year.

Rebalance your 401(k)

Head over to Bankrate's 401(k) retirement calculator to determine your best asset allocation based on age, risk tolerance and preferred retirement date. If you are underallocated in some sectors, you will need to sell where you are overallocated to bring your retirement plan back into balance.

There is no need to get overly complicated, but choose an asset allocation with which you are comfortable. You need to rebalance at least one time a year to make sure you stay on track to meet your goals.

Switch savings accounts

One of my tasks for the beginning of the new year is to find a place that will pay me a higher rate on my savings. Go to the savings account rate finder and see which banks have the highest rates.

Right now, a 1 percent interest rate is pretty good. I've had the best luck with online banks over the last few years, and they are great because you don't even have to show up in person to open an account.

Every month, I have an automatic deposit set up from my checking account to my savings that helps make sure I end up saving money for emergencies. Right now, I have $100 transferred after I get paid at the beginning of the month, and I'm looking to increase that for 2013.

Use a cash-back credit card

Typically, cash-back credit cards pay you back a certain percentage of your monthly statements in cash. There are plenty of cash-back cards, and this is all free money for some spending that you would have been doing anyway.

Some of these bonuses can be up to 2 percent, and even more in specific categories defined by the card issuer (such as gas or groceries). Getting paid for something that you are going to do anyway is one of my favorite ways to earn money.

Keep your credit card spending under control. If you end up paying interest on the card because you didn't pay the balance in full, you negate any value you gained from the cash-back portion of the card.

What tips do you have to help you save more in 2013?

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