Financial Resolutions to Start Your New Year
The new year is a great opportunity to reassess your goals and plans. While we may not be able to help you achieve your fitness goals in 2020, we can offer tips to help you get on a more solid financial footing. If you’re still looking for a new year’s resolution, we have a few examples below that are a great place to start.
Create a Realistic Budget
Basing your budget on facts is the only way to make one you can stick to. Start by writing down the amount of money you bring in each month as well as everything you spend. Include everything from your housing expenses to your streaming subscriptions, and everything in between. Of course, there will always be unexpected expenses like medical bills or auto repairs to consider, so we recommend giving yourself a little cushion in each of your budget categories or creating a plan to deal with those unexpected expenses. Better yet, you can even budget a Miscellaneous category to account for anything unknown that may come up.
Earn More Than You Pay in Interest
Take stock of how much you’re earning on your investments each month and then look at how much you are paying in interest for things like loans and credit card payments. Are you paying more than you’re earning? For many people, that is the case. However, you can take steps to turn that around. The more you can lower what you owe, the better off you’ll be in the long run. You can work toward this by making larger payments towards principal each month or even refinancing. While you’re at it, maybe it’s also time to revisit your investment accounts to make sure they are working for you.
Establish an Emergency Fund
An emergency fund is a great tool to consider for covering large unexpected expenses. The best way to establish your fund is to set up automatic payments each pay period to a savings account. What you don’t see, you won’t spend. Start with whatever you believe you can afford, even a little can add up to a lot rather quickly. Promise yourself to only use the fund in case of an emergency. If you have money left over at the end of the year, it’s a great idea to invest the money into an account with more earning power and start your emergency fund all over again.
Whatever your new year’s resolution might be, consistency is key if you want to stick to it. You’re sure to have ups and downs throughout the year, but don’t let it discourage you. Take time to reevaluate where you are each month and make adjustments to your game plan so you can best achieve your goals this year.