I’m not talking about how to save $0.10 on your next bag of nails. Today, let’s look at how to actually save money in the New Year. Meaning, how to put money into a bank account. More and more of it. And not take it out. You know, really save money.

Define Your Goals

What are you saving money for? What are your financial goals? Do you want to be able to buy a house? A new car? Go on a trip? Save up 6 months of emergency funds? Put more towards retirement? Pay off your credit cards?

Whatever it is, you need to define your goals, prioritize them, and project exactly how much money you’d need to achieve them.

Break it Down

Once you know how much money you will need to save to achieve your goals, break them down into microbits.

Let’s say you want to save $2,000 to go on a trip to Hawaii next year. Instead of thinking, “Oh, I should save money for that,” you should break it down to exactly how much you will need to save per month, or per paycheck, to make it happen.

It goes back to defining your goals. If you know you need to save $167 every month, that’s a much more concrete goal that just trying to ‘save more money’ or even focusing on saving $2,000. By breaking it down, you’re also more likely to achieve your savings goals. Why? Because knowing you need to save $42 a week is more actionable than the more distant and vague idea of trying to save $2,000 over the course of a year.

Be Realistic

We all want to have a million dollars sitting in the bank, but it’s simply not realistic. Based on your financial responsibilities, your debt, your income, or your lifestyle, you may not be able to put aside as much as you like. This is understandable and something everyone deals with, regardless of their income or debt.

The important thing is to be honest with yourself about how much you actually can put into savings per week, per month, or per paycheck, in order to achieve the savings goals that you’ve set. By being realistic about what you can accomplish, you’re more likely to stick to your savings plan.

And hey, if you are able to save more than you expected, so much the better.

Plan it Out

Once have set your goals and know how much you need to put aside each week to meet those goals, you need to plan out where that money is going to come from and where you’re going to save it.

Did you need to increase your income to meet your goals? Is that possible? If not, where can you cut back on your spending? Are there changes you can make this year to help you meet your savings goals?

If you are able to increase your income with a raise or taking on new clients, save that money. Don’t make more just to spend more.

Track Your Spending

Whether you know where to cut back on spending to save, or already think you’re as frugal as can be, tracking your spending is a great way to find out where your money is really going and what changes you can make to keep more of it.

This could mean actually writing in a journal what you spend money on every single day. By looking back over it every week or month, you’ll see trends and areas where you can save. You can also use websites and applications like Mint.com to automate this process and to dive into deeper analysis.

Start Early

If you wait until May to start saving for that trip to Hawaii, you can see how much harder you make it for yourself. When you get paid, pay yourself first by putting money into savings. Start now, don’t wait.

Same thing applies for those longer term savings efforts, like saving for a house or for retirement. The earlier you start, the more you will save, and the more likely you will be to achieve your goals.

Leave it Alone

Once that money is sitting somewhere building interest, let it stay there. Emergencies happen which can’t be controlled, so if you find yourself needing to use that money for an unexpected circumstance, just be glad it’s there. If this does happen, make a concerted effort to pay it back as quickly as possible — you can even put yourself on a payment schedule.

Look Towards the Long-term

A savings account is the most common way to save money, accrue some interest on it, and still have it on-hand in case you might need to access it.

However, if you make those funds harder to access, you’re more likely to leave the money invested. Long-term investments such as CDs, retirement accounts (IRAs and 401(k)s), bonds, and even stocks offer ways to invest your money at a higher rate of return — but you won’t have same-day access to your funds (in most cases). Also, if you make a withdrawal, there may be a penalty for doing so. Investing in stocks also carries the risk that you can completely lose your investment. On the other hand, if you bought 1 share of Google at its initial stock price of $85 a share in 2004, that same share would be worth over $600 in today’s market.

Happy New Year!

In general, most people are saving more and spending less these days, which is great. I hope this continues and I hope these tips help you to save even more.

I also hope you enjoy a very happy and prosperous new year.