Do you set New Year’s resolutions every January? How often do your goals come to fruition? If you’ve had a hard time sticking to your resolutions in the past, make this year different.
According to a study conducted by Fidelity Investments, nearly half of Americans who make financial resolutions want to save more money, 29 percent are aiming to pay down debt, and 15 percent aspire to spend less.
Ready to join their ranks? Resolve to make better financial decisions in 2020 with these three New Year’s resolutions you can actually keep.
1. Save More Money
Whether you want to put money away to pay for college, buy a house, or save for retirement, bolstering your savings is a praiseworthy resolution. To be successful, you must make your goals specific, measurable, and achievable. Here are some examples of actionable resolutions that will help you save more money this year.
Contribute More to Your Retirement Fund
If your employer offers 401(k) matching, take advantage of this free money to make your balance grow faster. To help yourself contribute more this year, set up automatic contributions up to the maximum limit. If you’re self-employed, or your company doesn’t offer a 401(k), you can open an IRA.
Assess Your Health Insurance
If you have a high-deductible, HSA-qualified insurance plan, you may be eligible to open a Health Savings Account. This is your chance to save on future medical costs with tax-free contributions, tax-free interest and earnings, and tax-free withdrawals (as long as you use the funds for qualified medical expenses). You can even invest your HSA balance in mutual funds to grow the account even faster.
Save Up for a Big-Ticket Item
Make a goal to save enough for a new TV or laptop you’ve been eyeing. Set aside a little each month, and before long, you’ll have the money to splurge on a big-ticket item without your savings account taking a noticeable hit.
Save for a Rainy Day
It’s wise to set aside money for emergencies. One goal is to save $2,000. You can reach this goal in 10 months if you contribute $200 a month to your emergency fund. When you hit $2,000, don’t stop there! A good rule of thumb is to have enough money in your emergency fund that you could live for three months without income and still be able to pay your bills. Here are 3 tips for setting up an emergency fund.
2. Pay Down Debt
Do you want to pay off your student loans faster? Maybe you wish to get a handle on your credit card debt. Whatever your specific goals, you can pay down debt in 2020 with these tips.
Review Your Credit Report
Being in debt has a negative effect on your credit score. Launch your debt reduction journey by requesting a free credit report from annualcreditreport.com (you can do this once every 12 months). This allows you to evaluate your debts and dispute anything that looks incorrect.
Pay Debts in Order of Interest Rate
Focus on paying off one balance at a time in order of interest rate. Get the high rates out of the way first. Remember to keep paying the minimum balance on all other debts to keep them under control.
Contribute More to Your Debt Bill
You probably won’t notice $50 missing from your account, but that additional contribution to your debt bill will help you pay it off that much faster.
Automate Your Payments
When you set up automatic payments, your debt will gradually decrease without another thought from you. As each balance gets paid off, remember to set a new, higher automatic payment for the next balance on your list.
Try a Personal Loan
If you have uncontrollable, high-interest credit card debt, you could save money in the long run by taking out a Personal Loan, and using that borrowed money to pay off your credit card balance. Then, you can pay off your Personal Loan at a lower interest rate, saving you a significant amount on interest. See how a Personal Loan could help you.
3. Spend Less
If you wish you could stop living paycheck to paycheck, or you want enough money to take a vacation, your New Year’s resolution should focus on spending less. Here are tips for holding onto more of the money you make.
Set a Budget and Stick to It
Start tracking your monthly spending and see how it compares to your earnings. Then, set a budget to help you stay in the black. If you need help, reach out to experts at GreenPath™ Financial Wellness.
Commit to No-Spend Days
Team up with a friend or your significant other and commit to spending $0 one weekend a month. On this designated day, no money leaves your hands — you eat at home, avoid shopping, and seek free entertainment.
If one weekend a month is too easy, increase your no-spend days to once a week. You can also make permanent changes, such as buying a coffee maker rather than going to Starbucks and packing a lunch to bring to work every day.
Identify a Bad Money Habit and Break It
Do you eat out too often? Indulge in redundant subscription services? Splurge on clothing and jewelry you don’t really need? Be honest with yourself about where you should cut back. Then, get support from a friend or significant other to help you stick to your goal.
If you tend to give in to impulse buys, try making a 30-day list on your phone. When you see something you want, pull out your list and write down the item along with the date. If you still want it after 30 days, go ahead and buy it. If you forgot about it or changed your mind, you just saved yourself from buyer’s remorse.
Make Maintenance a Priority
As they say, an ounce of prevention is worth a pound of cure. Maintaining your home (with heating, air conditioning, and plumbing inspections) and your health (by getting physicals, teeth cleanings, and eye exams) may feel like more money out of your pocket, but by preventing problems before they occur, you spend less in the long run.
Meet Weight Loss New Year’s Resolutions Without Spending More
Along with finance-related goals, the resolution to “get healthy” is among the most popular you can set. Many people think that losing weight requires a financial investment, but this isn’t always true.
You can go running or work out at home without an expensive gym membership or fancy treadmill. You can eat less junk food to cut back on your grocery bills, as well as your waistline. You can track your diet and exercise goals with a free smartphone app.
Sticking to a financial resolution is difficult, but you’re not alone. Remember, as a Connexus member, you have access to some incredible resources on your journey to success.
Step One: Review Your Financial Wellness
Our partner GreenPath™ Financial Wellness offers online courses, financial counseling, and other resources to help members work their way toward success.