Goodbye, 2017! Hello, 2018! It’s so good to see you. It’s nice to forget about the bad decisions and mistakes of last year and start fresh with a new year and a new you. With this new year comes a new opportunity to make a change for the better. It’s time to dust out your New Year’s Resolution notebook and make some goals to set you on a better financial path.
According to research at from the University of Scranton, about 45% of Americans decide to make their New Year’s resolutions each January. However, less than 10% actually achieve their goals.
This year, you can defeat the odds and achieve your New Year’s resolutions by setting reasonable, achievable goals. Here are a few financial resolutions you could achieve this year:
1. Save More. 55% of people said that saving more was their top financial priority in 2018. How much money would you like to save this year? Decide how much you think you could save and create a plan of how much you’ll need to put in the bank each month, or even each week to achieve your goal. Creating small achievements within a big goal can help boost your morale and help you to keep going. Putting money into your Health Saving’s Account or Emergency Savings Account can also help you create a decent savings in multiple accounts.
2. Spend Less. Did you go a little overboard on your holiday purchases last month? It might be a good time to reign in your expenses. When you spend less money, you have more money to put towards paying off debt or retirement. Look at your budget and find new ways to spend less and keep track of your expenses.
3. Create a budget. Roughly 40% of adults have a budget that they follow, according to the National Foundation for Credit. So, if you’re among the 60% of Americans not using a budget, make 2018 the year to start one. Check out RentPlusMoney for a great resource or make a spreadsheet and keep track of your expenses. Creating a budget is simple and easy to maintain. The hardest part is starting, so get started today.
4. Pay Off Debt. At the end of 2017, credit card debt reached an all-time high in the U.S., surpassing $1 trillion, according to the National Foundation for Credit. With that much debt owed throughout the U.S., paying off credit card debt should be at the top of most people’s financial New Year’s resolutions. But paying off debt can be hard. Use your budgeting tool to help you cut back on expenses to help you pay off debt faster.
5. Save for the Future. It’s hard to put away money for the future that could be helpful in paying off debt today. However, the earlier you start saving money for retirement, the more you’ll accrue in the long run. Start putting away a little bit at a time until you can work your way up to 15% of your income. Your future self will thank you for whatever you save today.
6. Build An Emergency Fund. Did you know that, according to the Financial Industry Regulatory Authority, 54% of Americans don’t have an emergency fund? Do you have any money saved for a rainy day? Start with an emergency fund of $1,000. Then, as soon as you feel comfortable, build your fund up to 3-6 months expenses. Don’t tempt fate and put yourself at risk for an unexpected financial catastrophe.
The start of a new year is the perfect time to improve your finances.
Benjamin Franklin once advised, “Be always at war with your vices, at peace with your neighbors, and let each New Year find you a better man.”
If you stick to your goals this year, you will find yourself in a better financial situation at the end of 2018. Happy New Year!