5 Money Resolutions You Should Make This New Year

by Connie Mei · 3 comments

make a wishMany of us make resolutions every new year. Typically about getting a new job, eating healthier, or spending more time with family. They are focused around bettering every aspects of our lives and one that is particularly important is our finances.

The new year is a perfect time to reassess our financial situation and set new goals. However, we tend to think very broadly when we think about what we want to achieve financially in the course of a year. For instance, we want to save more money or spend less. While those are great resolutions to have, they aren’t very specific. If you’re looking to better your finances this year, take a look at these 5 money resolutions that can really have a positive impact:

Save 20% of Your Income

Saving money is always a good goal to have, but how much is enough? That will differ from person to person, so take a look at your budget, make cuts, and estimate your expenses. Set a realistic but challenging goal for yourself. If you’re still looking for a benchmark, though, then aim for 20% as a start.

Pay Off High-Interest Debt

Paying off debt is probably always at the top of your perpetual to-do list if you owe money. It can still be overwhelming to tackle though. You might not be able to pay off all your debt in the coming year, but create a game plan. Start with paying off your highest interest debt first and then go from there.

Find a New Stream of Income

There might be a limit to how much you can save but you can definitely make more. If you need more money, look into finding a new stream of income. There are almost always ways you can bring in extra money, in addition to your full-time job. For instance, you can take on side-gigs like dog walking, babysitting, or freelancing writing. Do something that works with your skill set.

Actively Use a Budget

Many people have a budget, but very few people use it effectively. Most people tend to use the “set it and forget it” approach, but that won’t do you or your finances any good. This year, aim to actively use your budget. Review it monthly to understand your spending habits and whether or not you need to re-adjust your spending. Making small tweaks can help you save significantly.

Build an Emergency Fund

While you may be worried about your current expenses or paying off old debts, don’t neglect your emergency fund either. You never know what can happen and unexpected events in our lives tend to cost a lot of money. Aim to add $100 to your emergency fund each month but as little as $20 can make a difference too.

What you are new year’s resolutions, both financial and personal?

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  • Hosting says:

    Setting aside a bit of each paycheck for unexpected expenses should be a higher priority than concentrating on getting out of debt. After all, you don’t want to meet that objective only to get hit with another financial emergency without the proper safety net. So set a goal to put three months’ pay aside over the course of 2016, and divide that amount into monthly and weekly savings increments. This will make it clear what types of luxury expenses you will need to cut from your budget.

  • Endre Fredriksen says:

    I have only one money resolution “savings” and if I make it to the end of year: I will be able to finish roofing this year without raising new credit.
    – I didn’t buy two new iPhone6 to kids – they don’t like it but they will get over it.
    – I am not going to ski this season.
    – I am not going to buy a new TV, old one is still fine.

    • David @ MoneyNing.com says:

      Good plan Endre. I think just not skiing and the TV will cover at least most of your roofing expense!

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