Some people roll their eyes at New Year’s resolutions. Most don’t stick to their goals anyway, and why wait until January 1st to get started on them?
But that “fresh start” perspective can be the perfect fuel to launch your best year possible, so take the time to create the goals that will guide your 2016. We talked here about the best ways to create your financial resolutions for the new year. Now we have ideas that you can adopt and add to your own resolution list.
1. Figure out your past mistakes – It might feel counterintuitive to start the year off by looking at what you did wrong last year, but it will give you a frame of reference to start your goals. How much did you save? What were your financial weaknesses? Did you miss payments, fall into credit card debt or save dutifully, but don’t know your next step? This isn’t about beating yourself up; it’s about looking objectively at where you’ve been and how you can improve upon that. Know where you fall short to tackle the issue head-on.
But that “fresh start” perspective can be the perfect fuel to launch your best year possible, so take the time to create the goals that will guide your 2016. We talked here about the best ways to create your financial resolutions for the new year. Now we have ideas that you can adopt and add to your own resolution list.
1. Figure out your past mistakes – It might feel counterintuitive to start the year off by looking at what you did wrong last year, but it will give you a frame of reference to start your goals. How much did you save? What were your financial weaknesses? Did you miss payments, fall into credit card debt or save dutifully, but don’t know your next step? This isn’t about beating yourself up; it’s about looking objectively at where you’ve been and how you can improve upon that. Know where you fall short to tackle the issue head-on.
2. Make a budget that works for you – “Make a budget” is written on resolution lists year after year, but for many, it doesn’t go beyond that. According to a Gallup poll, only one in three American adults follow a monthly budget. There isn’t one hard-and-fast method to budgeting, so anyone can find one that works for them. Track it digitally with one of the many available apps (like Mint.com or BudgetBaker’s Wallet), write down every single purchase or payment you make, or separate your monthly money allowances into envelopes. Being more conscious of what you’re spending and where your money is going will make any of your other financial goals more attainable.
3. Automate when you can – A missed payment can ding your credit and slap late fees on your bill. If you’re prone to frequent missed payments, those fees can begin to pile up over time. Now that practically everything can be paid online, you can set up automated payments to keep your payments on track. You can set up automatic bill pays on anything from loans and credit cards to utilities and mortgage or rent payments. The danger with this option is overdraft charges or fraudulent activity, but it allows you to keep up on your account activity with the peace of mind that your payment won’t be late.
Use this to your advantage for saving, too. Sites like Smartypig allow you to create goals and allocate money to savings funds automatically.
4. Pay off debt strategically – Paying off your debt will help free up your money, raise your credit score and allow you to maximize your savings potential. Because it’s accessible and widely available, credit card debt tends to be the biggest offender. It also poses the largest risk in the form of sky-high interest rates. If paying off debt is on your 2016 resolutions list, funnel your money at credit cards first, then concentrate on subsequently lower interest rate debts.
5. Invest in financial education – This is a broad one, and it doesn’t automatically mean taking out loans for higher education. This could be as simple as purchasing books about stocks and investing, paying for a consultation with a financial planner or taking a class at a community college to sharpen your financial skills. Go beyond the basics this year and commit to learning more about your financial goals and future.
4. Pay off debt strategically – Paying off your debt will help free up your money, raise your credit score and allow you to maximize your savings potential. Because it’s accessible and widely available, credit card debt tends to be the biggest offender. It also poses the largest risk in the form of sky-high interest rates. If paying off debt is on your 2016 resolutions list, funnel your money at credit cards first, then concentrate on subsequently lower interest rate debts.
5. Invest in financial education – This is a broad one, and it doesn’t automatically mean taking out loans for higher education. This could be as simple as purchasing books about stocks and investing, paying for a consultation with a financial planner or taking a class at a community college to sharpen your financial skills. Go beyond the basics this year and commit to learning more about your financial goals and future.
Specific, focused financial resolutions will keep you on top of your financial game. Check in with your budget, debts, savings and investments at least once a month to stay on track, and get into top-notch money habits once and for all in 2016.