Small changes, big results

If you were faced with a major purchase, such as a needed appliance or a home or car repair, could you afford it without going into debt? Roughly half of Americans say they can't.

That's according to a 2015 Gallup poll, which indicated that even those with the highest income aren't immune to a lack of savings.

While 77 percent of Americans who earn less than $24,000 can't afford a major purchase or repair, roughly one in four Americans earning $90,000-$180,000 also have little to no money saved.

With the new year fresh on our minds, there's no better time to evaluate your finances.

Think small to save big

The first step to revamping your financial life is to take a look at your budget and to realize that every person's situation is unique.

There is no one "right" way to save money or change your spending, says Diane Luicana, MBA, a professional who helps local GED and college students, often struggling with money, explore their financial options.

"There are so many ways you can plan around your finances," she said. "It depends on where you are in your life."

While it's possible to save substantial amounts of money by giving up your daily store-brewed coffee, for example, Luicana doesn't encourage those she advises to scrimp.

Instead, she asks them to make simple, seemingly small changes to their biggest expenses - typically their housing, car payments and health insurance.

"The first thing I suggest, when people tell me that they have financial problems, is that people look at their big fixed costs," said Luicana.

"One person that I spoke to, her car payment was as high as her rent. She had a $550 car payment. Given that situation, what steps could she take to relieve a few hundred dollars a month?"

In this case, the woman eventually went back to her car dealership and switched to a more affordable car.

"Your housing, your car and your health care - just looking at those three areas of your life could have a significant impact, very quickly. It could change your life," she said.

"It can change the way you can save, or to make better decisions for the long term, whether it's a down payment on a house or cash to buy a used car so that they won't have to lease a car anymore. We can usually find one major thing that will really help them pull themselves out of the hole. Unfortunately, that's when most people ask for help, once they're so far in the hole that they can't find a way out."

It's also important to "step back and think about the true cost of a decision," she added.

Renting versus buying a home means comparing the true cost of renting or homeownership, including taxes and utilities.

For college students, she encourages them to make sure they're maximizing the number of credits they can take if they're paying for full-time tuition.

Even changing cars can have a long-reaching impact on your finances than you might realize, since the style and age of a vehicle can also impact auto insurance.

Increasing income

In addition to cutting costs, the new year is also a good time to consider your potential for raising your income.

"I always ask people, do you have a degree? What's your next step at work?" said Luicana. "It's easier to raise your income than lower your expenses."

She often advises people to explore certificate or specialization options in their field, which might lead to a raise or promotion.

"You have to be reasonable. You can't always go back for a four-year degree," she said. "But what can you do in the next few months or year so that you can get that next promotion or opportunity, to be prepared for it when the opportunity arrives?"

Start with $1 per week

Local banks are also encouraging people to seize opportunities, both large and small, to save money and plan ahead.

Mauch Chunk Trust Company has started a savings challenge for its customers, encouraging them to start in January by saving just $1 in the first week of January - and increasing their savings by $1 each week, until they save $52 in the last week of the year. (In the last week of January, you would have saved a total of $10.)

It's a small, seemingly painless amount with a big payout. Those who follow the plan each week will have saved nearly $1,400 by the end of the year.

"We were looking for a way to make the savings habit fun," said Mauch Chunk Trust Company CEO Patrick Reilly.

"Some people tend to spend every dollar they earn. But everyone, regardless of their circumstances, should try to save something."

"We do some things and don't really think about it," he said, noting that buying a daily treat or splurging at a restaurant might be a habit you've developed - and that setting aside a few dollars each month can also be a habit every person can start.

Reilly noted that while Mauch Chunk Trust Company has a Christmas club that allows bank members to save money for months before Christmas, many people open their account just a few weeks before the holidays and start frantically saving.

"If they put their mind to it, people can accomplish a lot," he said.

"We're trying to find like-minded people who want to start a savings habit, and to challenge each other. We're a small, community bank. We can't change the world, but these things can make a difference to local people."