5 Financial Resolutions for the New Years
With the new year coming up, it is always a great time to set new resolutions that you can work towards with a fresh start. Dealing with finances can be stressful and confusing, so making financial resolutions can help you take small steps towards becoming financially stronger for the new year. Here are a few financial resolutions you can add to your list this year.
1. Organize your finances
It is important to start off with the small basics that can help improve your overall finances and assist you in achieving larger financial goals. Numerous bills and income statements can make it difficult to track how much money is coming into your account and how much money is leaving it. By taking time to organize finances, it will become easier to find ways to properly manage it.
A great way to begin organizing your finances is to use financial organizing apps, such as Mint. Mint is an excellent application that connects to your bank account and automatically informs you of how much money is coming into your account, how much is being spent, and what categories you are spending your money on. If you prefer a paper-and-pen option, creating a finance journal can be very beneficial. By having a journal that lays out your income and expenses, it will give you a better visual of your money.
2. Begin an emergency fund
Many people fall into debt when high-cost emergency situations arise in their life. Events such as medical emergencies and natural disasters can be very costly and detrimental to your finances if you are not prepared for them. By starting an emergency fund and frequently contributing money to it, you will have access to money for emergency situations without it damaging your bank account.
Starting an emergency fund doesn’t require large sums of money to constantly be added to it. An excellent activity that you can do to help save for an emergency fund is the penny challenge. This activity begins with you adding a penny to your savings fund on the first day, 2 cents on the second day, 3 cents on the third day, and so on. It lasts for a year, with $3.65 being the last amount added, and it will allow you to save $667.95!
3. Start checking your credit report every quarter
Credit is an extremely important part of your finances. Whether it is getting a loan, buying a car, or renting an apartment, many businesses check your credit report to see if you are eligible for their product or service. Being up to date on your current credit and credit history can help you get an idea of what lenders are seeing when they access your credit information. It will also give you an opportunity to verify the information that is listed on it and fix any issues on it, if necessary.
For 2023, credit reporting agencies such as Equifax, Experian, and TransUnion will offer free weekly credit reports. To view your credit reports, visit Annual Credit Report.com.
4. Work on your retirement savings
For many individuals, retirement can seem so far out into the future. No matter how far out your retirement years are, it is important to begin working on your retirement savings as early as possible. If your employer offers a 401k contribution match, it can be very beneficial to contribute the full amount possible, as the employer’s matching contribution will essentially be free money. You can learn more about 401k and employer matches by clicking here.
5. Pay off your credit card debt
Working to pay off your credit card debt can seem scary at first, but it becomes easier once you understand the simple steps you can take to tackle it. Paying off debt in a timely manner is crucial to avoid interest piling up. Look into picking up a small side hustle that can help you boost your monthly credit card payments. Budgeting is also a great method to find areas where you can allocate your money towards paying off your debt. The "snowball method" is an excellent way to work towards being debt free and it involves reviewing and arranging your debt into a list and paying off the smallest debt first and working your way up to pay off your largest outstanding debt amount.
With a new year comes new resolutions. Take this as an opportunity to set up financial resolutions so that you can work towards becoming financially stronger throughout the year.