A lot of people consider New Year’s resolutions a joke. After all, around 80% of them fail by February. But setting goals and sticking to them is an important first step in achieving your personal and financial dreams. The trick is to keep them reasonable so you can attain short-term success and move on to your next set of goals.
This is just one of many strategies that can help nearly everyone improve their financial situation, bringing them closer to achieving their money-related goals.
So, if saving more and spending less is on your 2022 to-do list, we’re here to help. These 15 financial resolutions are not only attainable, but they can likely put you in a better financial position when you reach them. Win-win!
1. Implementing the 30-day Rule for Purchases
The 30-day rule is a simple strategy that has the power to help you control your spending and otherwise make the right financial choices for you. Essentially, if you feel the urge to buy something that’s non-essential, whether it’s in a store or online, the rule says: Stop. Leave the store. Click away from the site.
A great next step is to write down what you wanted to buy, along with where it can be found, and its price. Date the document and then mark on your calendar when 30 days will have passed. If you still want the item and you have the money, it may be OK to buy it. If not, you’ve saved that money for something else you really will want.
2. Trying a 30-day Money Challenge
Sometimes giving yourself a short-term goal can be a great way to motivate yourself to start exercising, eat healthier or even spend less and save more. After all, it’s just 30 days! Who can’t do a thing for 30 days, right?
But here’s what can make this approach so effective: You have to change your habits in order to reach your short-term goal. By the time you achieve whatever that 30-day goal is, you will have changed your saving and spending patterns and may be prepared to increase it to 60- or even 90-days. Maybe even a lifetime!
3. Creating a Budget and Sticking to It
Creating a budget allows you to look and see exactly what you’re spending your money on, where you’re spending too much, and where you could be saving more. It can also help ensure you stay well within your means and put aside more for the future. Creating a budget doesn’t have to be difficult.
Start by gathering all your financial documents, including all of your monthly bills. Next, create a list of all of your monthly financial needs like rent, groceries, bills, and other expenses such as an entertainment budget. Finally, compare it to your income stream, review, and adjust from there. For more information, check out How to Make a Monthly Budget.
4. Automating Your Payments
From your credit card bills to rent, student loans to your heating bill, almost all of your bills can now be automated.
Just make sure you pick a date each month that works for you (say, a day or two after you know you’ll receive a check) to better ensure you have enough funds to cover the costs. This way, you can set it and forget it.
5. Building an Emergency Fund
We know, the idea of building an emergency fund can feel wildly daunting. However, you’ll probably be extremely happy you have it if you ever need it. For a reasonable emergency fund savings goal, you can calculate and aim to save three to six months worth of your expenses. (This is where your budget should come in handy).
Try to set aside a little each month into this fund until you hit your target. This way, if you have an unexpected emergency — say your car breaks down or you lose your job — you will have a cushion to fall back on.
6. Attempting to Pay Off Your Credit Card — in Full — Every Month
Credit cards are notoriously difficult to pay off thanks to compounding interest . If you can, try and pay off your credit card debt, then stay within your budget so you can pay your balance off in full each month.
This could help raise your credit score and can give you more peace of mind knowing that you don’t have any looming debt hanging over your head.
Check out these calculators, which can help you see exactly what the path to paying off your credit cards, student loans and other debts may look like.
7. Putting More Toward Your Student Loans
Being able to finally pay off your student loans is a great feeling. Help accelerate that process by adding just a few dollars to your student loan repayment each month. Even $20 can help you pay off the interest and principal of your student loan that much faster. (And hey, you can even automate this payment, too.)
8. Checking Your Credit Report More Often
You are your own best friend when it comes to credit monitoring. Credit scores play a huge role in borrowing and lending. If you go to buy a home, a car, take out a loan, or even to refinance, chances are your credit score will play a role in the approval process.
By checking your credit score often (this is different from pulling your credit report ) you can stay on top of any changes or discrepancies, and make decisions to improve your score in the future.
9. Considering a Mortgage Refinance
Homeowners often look to refinance their mortgage when it could benefit them in some way, like with a lower monthly payment. Refinancing is the process of paying off a mortgage loan with new financing, ideally at a lower rate or with some other, more favorable, set of terms.
Check out these seven signs to refinance your mortgage to see if this could be the right move for you.
10. Getting Your Full 401(k) Employer Match
Does your employer offer a 401(k) match? Not all companies offer this benefit, and some have prerequisites for participating in the match, such as a minimum required contribution or a cap up to a certain amount. But if they do and you aren’t taking advantage of it, you’re leaving free money sitting on the table.
You can learn more here about how 401(k) matches work.
11. Taking a Finance Course
If you’re really looking to take your financial know-how to the next level, try enrolling in a financial education course. Through one of these courses you have an opportunity to learn everything from budgeting and saving, to investing and financial family planning.
Many of these courses are offered for free on the internet, meaning you don’t even have to get off the couch to help improve your financial future.
12. Considering a Side Hustle
Having a side hustle is all the rage, and for good reason. It’s an excellent way to supplement your income so you can save more, pay off debt, grow an emergency fund, or just use it as fun money to live your life.
Best of all, there’s a side hustle for everyone. If you like talking to new people, maybe driving with a ride-sharing service is for you. If you’re creative, freelancing on websites like TaskRabbit with your graphic design, photography, writing, or other creative talents can also bring in some cash.
13. Asking for a Promotion or Raise
If you’ve been with the same company for more than a year, it’s time to think about asking for either a promotion or a raise. The best way to do this is to go in prepared . Start by gathering documentation of all the good things you’ve done in your job over the last year and be prepared to discuss how they’ve helped the company’s bottom line.
Next, take a look at what others are making in your same field by searching websites like Glassdoor and PayScale to find comparable data. Finally, be prepared for a bit of pushback and get ready to negotiate what you really want.
14. Figuring Out if You Need Some Assistance
Sometimes our finances can get away from us, whether through unemployment, underemployment, or unexpected expenses that create debt. Knowing when you should ask for help in these circumstances is important. Whether you need to ask friends or family for a loan, take out a personal loan, refinance some of your debt at a lower interest rate, or even file for bankruptcy, it’s important to remember there is no shame in doing these things.
15. Adding 1% More to Your Retirement Account
If you’re already putting money into a 401(k) or an online individual retirement account, that’s wonderful news. Now, do you think you can add just 1% more of your income to that account? Odds are you can, and those savings can seriously add up.
For example, NerdWallet crunched the numbers and found that if a person is making $40,000 a year and puts away 6% of their paycheck starting at age 22, they could save $551,199 by the time they reach a retirement age of 67.
Not bad. But, if that same person increases their retirement allocation by 1% a year to a maximum of 20%, they’d be able to save a whopping $1,364,292, accounting for a $813,093 difference. The calculations above assume a 6% annual return.1
The Takeaway
If you have a steady income and aren’t living beyond your means, these ideas should help you get a handle on your money so you can start saving more in the new year.
For some extra support, SoFi Money can help you earn up to 15% cash back on your purchases that you can put toward your savings goals. From auto-save to bill-pay, having a solid cash management account that keeps you alert of your finances can help keep you in good standing throughout the new year.
Want to get a better grasp of your money this year? See how SoFi Money can help you reach your financial goals.
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Source: sofi.com