5 Financial Resolutions You Can Meet Before the End of the Year

January is a month of change for many people, especially when it comes to finances.

A new year marks a time when you might reflect on the past year and assess your financial wins and losses. If you do decide to make financial resolutions, that’s only half the battle. Sticking with them is the hardest part. So, why not get a jump on this and start improving your finances right now.

Here are 5 financial resolutions that you can meet – and keep – before January rolls around.

1. Get on a Budget

Having a clear budget is a key element to your financial success. A budget helps you plan out your spending so that you know where your money is going. It’s also key to have a budget in place before setting big goals, like paying off a ton of debt.

Once you create your budget, you’ll want to make sure it’s realistic and sustainable so you can stick to it long-term.

To start, track your spending to get a feel for how much your regular expenses truly are. Then write down all your fixed, variable and hidden expenses. List out all your sources of income, and subtract your expenses from that income amount. The goal is to end up with a positive number or at least zero. This means that you either have money left over or you’re spending exactly what you’re making.

Here’s another budget benefit: You’ll be less stressed and overwhelmed about money because you have a plan.

2. Switch to a Better Bank Account

Have you settled for a bank account that charges you fees just because it’s a pain to change banks? Maybe you’re comfortable with your bank even though you know there are better options out there.

If you’re tired of hidden fees and monthly maintenance charges, it’s time to switch banks. You can start by comparing options. Take into consideration finding a bank account with no fees and a bank that lets you set up direct deposit and get paid early. Also, factor in whether ATMs are convenient and accessible, and whether the bank is mobile-friendly.

Once you narrow it down to your final choice, all you need to do is apply and move your funds over.

3. Stop Using Credit Cards Unwisely

If you’re in credit card debt or struggle with controlling your spending, you don’t have to wait until the new year to turn things around.

You can change your habits and start using credit cards wisely before the end of the year. For starters, limit the number of cards you carry in your wallet. Avoid impulse purchases and temptations by unsubscribing from retailer’s email lists and staying away from stores that trigger you to overspend.

After that, get into the habit of paying your bill off in full instead of carrying a balance each month. You can even simplify things by just charging one recurring purchase to your credit card each month (like a monthly Netflix charge) and paying it off every month.

4. Cut Your Spending by 10%

Sometimes it’s easy to accelerate your spending during the year without even realizing it. Lifestyle inflation occurs when you start naturally spending more money as a result of an income increase.

You can combat this by doing an expense audit every few months to make sure you’re not overspending in several areas of your budget.

With tons of holiday sales currently going on, you may be able to cut quite a few expenses to lower your overall spending by at least 10%. Can you find a cheaper gym membership or start working out at home? Can you shop around for more affordable car insurance? Can you cut cable or lower your grocery spending? Once you start going through your expenses with a fine tooth comb, you’ll realize that you can easily cut back by 10% – or more.

5. Open a Retirement Account and Contribute Regularly

If you haven’t opened a retirement account, now is the best time to get started. You can open a 401(k) through your employer or an Individual Retirement Account (IRA) on your own.

Opening a retirement account is easy, but contributing to it regularly can be challenging. Luckily, you don’t have to start out by making huge contributions. Instead, start by contributing what you can, and then slowly increase the amount over time.

Saving something is better than nothing and will help you create the habit of setting money aside for retirement. To make things easier, you can even set up automatic transfers from your checking account to your retirement account.

Financial Resolutions Don’t Have to be Complicated

Don’t psych yourself out by setting overarching financial resolutions that you assume have to be stretched out over a 12 month period. Instead, write down what you want to accomplish or change and break it down into smaller chunks. You may want to look at habits you can create and steps you can take within a 30 day period.

Finally, by following the 5 steps above, you can start improving your finances at any time. There’s no reason to wait until January rolls around.

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