Every January, 40% of Americans make new year’s resolutions, but it turns out only 8% succeed at keeping them. However, when it comes to improving your financial wellness, making some money resolutions for the new year can actually make a difference. Committing to a money goal for the year can make you more optimistic, financially secure, and debt-free.
Not sure where to start? Consider these 10 resolutions to help you grow your financial well-being:
1. Make a budget
First things first: create a budget. Budgeting is a tool that can help you achieve your financial goals. It’s not just restricting how you spend money. Opt for the positive mindset and you’ll be more likely to achieve those goals. Start by paying yourself first, then, set gentle boundaries around how to spend whatever is left. Revisit your budget each month and hold yourself accountable and course correct when necessary. Make sure to set aside a small allotment as a reward to buy the things you want vs. need. It will give you something to look forward to each month.
2. Switch banks
Many people don’t realize that their bank may actually be costing them hundreds of dollars a year. In fact, a report in 2017 found that the average American pays over $329 dollars in bank fees per year. Consider switching to a bank account with no fees, such as Chime. Chime has no overdraft fees, no minimum balances, foreign transaction fees, or monthly fees. The award-winning mobile banking app also helps you put your savings on autopilot with round-ups on every purchase and the ability to automatically save 10% of every paycheck. And as an added bonus, you can get paid up to two days early! Who doesn’t love an early payday?
3. Prioritize purchases that pay you back
Focus on saving up for important purchases that are an investment in your future. For instance, saving for that computer that will help you be more efficient and boost your freelance game, or diligently socking away funds for a down payment on a home are worthy investments. Not only will they enhance your life, but they’ll pay dividends in the long run.
4. Put lifestyle inflation in check
It happens to the best of us. The first thing we do when we get a raise? Upgrade our lifestyle to match what we’ve earned. It’s called lifestyle inflation, and it’s one of the biggest potential blockers to growing your net worth. That’s right. Your ability to improve your financial potential has as much to do with how you spend as what you earn. You might have earned a generous increase in your paycheck, only to see it get eaten up by say, a new monthly car payment. Instead, focus on your future lifestyle — the one that only compounding interest can help you attain, curb your spending and stick to your original budget. You’ll thank yourself later.
5. Cut out any unchecked expenses
Look for those expenses that you don’t even realize you’re paying and cut them. A good place to start is getting rid of spending twice on the same thing. Apps like Trim to see where you double up on similar subscriptions.
6. Pay down student debt
It’s sad but true: in 2016 the average U.S. student debt load in 2016 is a boggling $32,000. Before committing to a monthly amount that works for you, check your current repayment plan, and what interest rates you’ve locked in. You may find that refinancing or consolidate your student loans could you save money in the long run. Then, consider other debt relief hacks such as taking advantage of penalty-free prepayments.
7. Build an emergency fund
Saving money is top of mind for most people in the new year. In fact, in a survey of 1,200 Millennials conducted by SurveyMonkey, we found that 93% said that that regularly setting aside money for savings is a priority. However, 63% of Americans don’t even have enough savings to cover a $500 emergency. You never know when a surprise expense like an accident or a trip to the hospital will occur, so consider prioritizing an emergency fund. If the recommended amount of saving 3–6 months of income seems daunting, take baby steps. Start with a buffer fund of a few hundred dollars, then a month of expenses, and so forth.
8. Take on a side gig
As you know, side hustles are a great way to rake in extra cash. Not sure where to start? You can check out sites such as TaskRabbit and Fiverr to find people around your city willing to hire you for a wide variety of tasks. You can even earn money dog sitting or by doing a little spring cleaning of your wardrobe. When side hustling, just know exactly what that extra cash will be used towards (see: emergency fund). Otherwise, it may be far too easy for extra income to get squandered.
9. Ask for a raise
If you’ve put in a lot of extra work on a project or made a valuable impact at your workplace, don’t be shy about negotiating for more pay. Do your homework to determine the true market value or your role and expertise position the ask in terms of your contribution to the company, and why it would benefit your employer to provide a monetary incentive for you to stick around. If you feel you’ve reached the cap on what you can learn and earn at your current job, look for career opportunities in the new year.
10. Practice financial mindfulness
Being financially mindful means appreciating what you have and considering the trade-offs involved when spending money. When that paycheck comes, don’t think about why it’s not as high as you’d like. Celebrate that it came in the first place and affirm yourself for having earned it. Before you click “Buy,” stop to consider if what you’re about to purchase will bring lasting satisfaction. Practicing financial mindfulness empowers us to resist the lure of short-term gratification in exchange for future earnings.
Like anything worth doing, accomplishing your money goals takes hard work and discipline. Set yourself up for success by focusing. Prioritize your goals and focus on them one at a time. Once you’ve gained momentum on one goal, then consider tackling the next one.
Remember, a goal set properly is halfway achieved.