With a new year comes a new opportunity for a fresh start.
Whether you achieved your financial goals from last year or you hit a roadblock, now is the perfect time to reassess and pick some new money resolutions for the new year.
Here are 16 financial resolutions for you to consider making.
Track Your Spending
How many times have you wondered where your money went?
If it’s more than zero, you might want to consider making a new year’s resolution to start tracking your spending.
Taking note of every purchase you make and bill you pay will help you become more aware of your spending.
With awareness comes clarity and the ability to start spending according to your values.
Tracking your spending is one of the best ways to start taking control of your money.
Set Some Financial Goals
It’s easy to say you want to save more or pay off debt, but if those are really your goals, it’ll help to get more specific.
Determine what exactly you want to save for or pay off and make a plan to do it.
When you set your goals, make sure you’re using the SMART method, making them:
By creating SMART goals, you’ll be more likely to stay motivated and achieve them.
If you’re looking for a way to monitor your progress, check out the article How to Use a Savings Tracker to Reach Your Financial Goals.
Do a Monthly Savings Challenge
If you’re looking to save money quickly or adjust your spending habits, give a monthly savings challenge a try.
Monthly challenges can have a huge impact on your finances.
They’re short enough that you shouldn’t burn out, but just long enough you should see some results.
Some of my favorites are:
- No-spend challenge
- Round-up challenge
- 31-day savings challenge
- Eat-at-home challenge
Your results will vary based on the challenge you choose and what your current level of spending looks like, but monthly money challenges are one of the best ways I’ve found to save money quickly.
Pay Off Your Credit Card Debt
For anyone with credit card debt, paying it off would be a smart money goal for the year ahead.
Not only will you have one less bill to worry about, you’ll free up that money to put toward your future goals.
If you’re struggling under the weight of credit card debt, check out the article 7 Steps to Get Out of Debt and Stay Out of Debt for some tips and advice.
Build an Emergency Fund
If 2020 has taught us anything, it’s that we need to be prepared for the unexpected.
Building an emergency fund that can cover 3-6 months of living expenses is one of the best ways you can ensure your financial success.
And a credit card with a high limit is not the same as an emergency fund.
While you may still need to pay unexpected expenses with credit as you build your emergency savings, you’ll want to shoot for having the actual cash in your accounts eventually.
Need some help figuring out just how much your basic living expenses are? The article Bare-Bones Budget: What Is It and How to Make Your Own will help you get started.
Boost Your Credit Score
With interest rates at an all time low, you may be looking into making some big purchases soon.
Before you do, make sure you know your credit score and make any moves to
If you need to
Optimize Your Retirement (Max the Match)
Does your employer offer to contribute a match to your 401k?
If so, make sure you’re contributing at least that much so you can max the match.
It’s literally free money.
If you’re not sure about the specifics for your company, contact your HR department to find out.
Also, it’s worth double-checking the funds your retirement is in to make sure you’re paying the least amount towards management fees.
Even something as tiny as a 1% fee can add up to huge amounts over time.
With the amount of time involved in investing for retirement, not only are you paying those fees now, but they’re costing you the accumulated interest you could be earning in the future.
Automate Your Savings
Do you struggle to save money?
I know it can be hard to save when your income is limited, but by automating the process you can force yourself to save even if it doesn’t feel possible.
First, make sure you’re saving for retirement. Try to contribute whatever percentage the company will match. Again, that’s free money they’re contributing to your future.
If you aren’t eligible for a match, start with 1% and gradually increase it each month.
Next, build your sinking funds and automate your savings goals contributions.
Pinpoint your most important goals and automatically move money into those goals with each paycheck.
Make a Budget
A lot of people recoil at the thought of a budget, but if you want to take control of your money, your budget is your best tool.
For some people, it helps to think of a budget as a spending plan instead. In practice it’s the same – you’re simply telling your money where it needs to go.
The trick to creating a budget you can keep is to make sure you’re spending intentionally and in alignment with your goals and values.
For a more comprehensive guide to crafting your perfect budget, read How To Make a Budget: The Complete Guide.
Just Say No to More Debt
Sometimes the best thing you can do to get out of a hole is to STOP digging the hole.
If you’ve got any debt or have struggled with debt in the past, changing your mindset so that debt is no longer an option is a great New Year’s resolution.
Whether you freeze your credit cards or delete them off your devices, saying “NO” to more debt will definitely improve your finances.
Review Your Expenses
If I asked you to estimate your discretionary spending for the month how close do you think you’d be?
I’m betting while you may have an idea of most of your spending, you’ve likely forgotten about several things as well.
One of the biggest areas of budget leaks is subscription costs.
Take a look at last month’s expenses and see how many you forgot about.
Are there any expenses that don’t really support your goals anymore?
If so, go ahead and cancel them. If you miss them, you can always re-subscribe later.
Set Up Sinking Funds (Prepare for the Unexpected)
If you’ve ever felt the panic of a large unexpected expense, consider setting up sinking funds as your New Year’s resolution.
Sinking funds are simply savings buckets for unexpected or infrequent expenses. Things like Christmas and car repairs make great sinking fund categories.
For more information about using sinking funds to hit your savings goals read The Ultimate Guide to Sinking Funds.
Monitor Your Credit
It seems like there’s a security breach or hack almost every month.
While it may feel like just another news story, if your information gets stolen, it’s an absolute nightmare to recover from identity theft.
Checking your credit report every year is a good start, but opting for credit monitoring can help protect you from ever having to deal with identity theft.
Check your credit scores anytime, anywhere, and never pay for it. Credit Karma gives you the information you need to take control of your credit.
Cut Back on Bad Spending Habits
Fast food is my boogie man.
It’s a bad spending habit I’m always struggling with.
Be honest with yourself and figure out what spending habits you have that are negatively impacting your finances.
Maybe you’re addicted to the convenience of fast food like me, or maybe you have an issue with impulsive purchases or emotional spending.
Whatever your vice, make a resolution to cut back on that indulgence.
You don’t have to eliminate it to still have a positive impact.
Refinance Your Mortgage & Student Loans
While most of us will look back on 2020 with disdain, one positive area has been the ever declining interest rate.
If you’ve got a mortgage or student loans eligible for refinancing, start checking around to see what rates you can get.
Mortgage rates are at an all-time low, and the savings of even a half percentage point over the life of a multi-year loan can save you thousands of dollars.
Call for Better Rates
Calling to get reduced rates for your debt and insurance are relatively
As money resolutions go, this is one of the easiest to do and has the fastest results.
If you’re carrying any debt, call your credit card company and ask for a lower interest rate. If they don’t budge, look into transferring your balance to a card with a 0% introductory rate.
For insurance, make sure you’re checking around every time that renewal bill comes.
You might already be getting the best deal, but it doesn’t hurt to check. Plus, even if you don’t want to change companies, you may be able to get them to match a competitor’s rate.
Boost Your Income
I’m all about finding creative ways to save money, but if you can find ways to boost your income, you’ll hit your financial goals faster than you can by just cutting expenses.
Here are several ways you can earn some extra cash:
- Asking for a
- Picking up extra hours
Instacartand shopping for others
- Pet sitting
- Selling your crafts or baked goods
You’re really only limited by your time and imagination when it comes to finding additional sources of income.
Declutter & Sell Your Stuff
Decluttering by itself may not seem like much of a financial goal, but you’d be surprised the impact it can actually have.
Not only can you sell the stuff you no longer get value from, but when you stand back and look at all you’ve accumulated you may start to think twice before you go buy something else.
I’ve found that when I look around a room and think about the cost of everything, more often than not, I’d rather have the money back in my account.
Also, decluttering doesn’t have to be limited to just the stuff around you.
Take a look at the subscription services, apps, bank accounts, and credit cards you’ve got piling up and purge those as well.
Do you really need 5 different bank accounts or 6 different credit cards?
Maybe. But those cards aren’t just taking up space in your wallet, they’re also one more thing you have to worry about keeping track of.
Not to mention the potential security risks and fees associated with dormant accounts.
Decluttering is a great way to tidy up your house as well as your wallet.
Looking to make some quick cash from your clutter? Sell your old electronics, DVDs, CDs, video games, and more for cash today!
Start Meal Planning
Food expenses are the third highest expense for most families, behind only housing and transportation costs.
If your grocery and eating out categories are threatening to swallow up you entire budget, meal planning is a great tool to get things back under control.
For a complete guide to meal planning and the resources to help you get started check out:
Learn Something New
We learn something new everyday, whether it’s some random trivia or something from the news.
Try to make what you’re learning something that can actually benefit you financially by being more deliberate about the content you’re consuming.
- Learn how to get started investing with a personal finance book.
- Get motivated to start a side hustle by listening to a new podcast.
- Watch a video that can take your hobby to the next level.
Just remember, information and education are only useful when you put what you learn into action.
Prepare an In Case of Emergency Document
No one likes to think about emergencies or family tragedies, but making a plan now can give you peace of mind that your family will be set if the unthinkable ever does happen.
We witnessed the struggle and confusion a sudden death can have first hand last year.
Even if you think your spouse or family members know enough about your finances to get by, it’s a good idea to have everything written down.
Making financial decisions while under emotional stress is never a good thing.
Having a document that details all the specifics will help them focus and avoid mistakes or frustration on top of the emotional toll they’re already experiencing.
Check out the Smart Money Mamas In Case of Emergency Binder to get started quickly.
We all want 2021 to be infinitely better than 2020.
Pick just one of the financial resolutions above to improve your finances this year.
And for a massive impact, mix and match them. Let me know in the comments which money resolution you’re tackling this year.