New Year’s Money Saving Resolutions
When it comes to money, setting money saving New Year’s resolutions for yourself is easy, but committing to and following through with those resolutions is a completely different story.
This is why it is important to set realistic and achievable financial goals for yourself. There is hardly a quicker way to shove those New Year’s resolutions aside than to realize that they are unattainable. That being said, here are a few ideas for money-saving New Year’s resolutions that are set to reasonable levels and thus promote continued progress throughout the year.
1. Become debt-free
Let’s start with the big one first – freeing yourself from debt. Whether this is a realistic and attainable goal is really dependant upon your financial and debt situation. How heavily you are in debt, what type of debt you hold (credit, car loan, mortgage, etc.), your income level, and the interest rates pertaining to your debt can all play into how quickly or how successful you are in becoming debt-free.
It is often important to start with reducing credit card debt first since it will likely have the highest interest rate. Smaller debts amounts are also good spots to begin so that you build a little confidence by crossing them off your debt list, leaving you to focus on more problematic debt issues.
2. Find ways to generate side income
Picking up extra income can be a wonderful financial resolution. In a suffering economy, the peace of mind and supplemental income that comes with a second job or side business can be a great buffer against the stresses of economic strife. Even an extra hundred dollars a month can be a great way to reach other financial goals like paying down debt, making an extra mortgage payment or starting an emergency fund.
3. Start a rainy day fund
If you don’t have one already, starting an emergency fund can be a good New Year’s resolution. You never know what tomorrow might hold when it comes to your finances, but with an emergency fund, you can face the unknown with a bit more confidence. While some financial gurus call for you to have $500 in the bank, you may want to stash a bit more than that. $500 won’t get you far these days, especially if you lose your job. Even one or two months of your average income can go fast, so build up a fund you’re comfortable with. Bear in mind that if you have outstanding credit card debt, you might want to deal with that first to eliminate those costly interest payments.
4. Learn to save
Learning to save sounds easy, but it doesn’t happen overnight. Becoming accustomed to money-saving techniques can be a lengthy and involved process, especially for those of us who haven’t had much experience with it. Using coupons, looking for store discounts and sales, tracking our expenses, and utilizing a budget are skills many of us have learned to do without until recently. A fresh year provides the perfect excuse to buckle down and become familiar with the saving process.
5. Build a budget
Starting off the year with a budget is an easy resolution that can be completed while watching television or soaking in the tub. Your budget doesn’t have to be in a fancy spreadsheet with graphs and charts. A simple, hand-written list of expenses and incomes can get you started, and can be expanded later if needed. The hard part of this resolution is committing yourself to watching, modifying, and adhering to your budget over the course of the year. Consider putting your budget in an easy to see a place like your refrigerator or computer desktop so that it will be a constant reminder of your financial goals and your commitment to those goals.
Thoughts?
If you’re looking to better your financial life, follow some (or even all!) of these tips. Just remember that making money, saving money, and just learning how money works can take time, so be patient with yourself and know that it’s okay to have questions.