With each new year comes the perfect opportunity to reflect on the progress of your financial life and create actionable goals for the 12 months ahead. While most people focus on saving more money and paying down debt, others place importance on shifting behaviors around money management and increasing their income in an attempt to improve one’s financial circumstances.
Millions of Americans will create a New Year’s resolution in 2024, but only a fraction of them will succeed in achieving their goals. It’s discouraging to resort to half-measures or outright failure for weeks or months at a time, prompting most people to abandon their resolution altogether.
One solution is to set attainable financial goals that take small steps in the right direction rather than unlikely giant leaps. If you’re planning to make the new year your best one yet, check out our top financial New Year’s resolutions to get you started with a bang.
Top 9 Financial New Year’s Resolutions
1. Boost Your Credit Score
One of the most powerful financial moves you can make in the new year is checking your credit history reports and improving your scores. You can view your reports for free with the three major credit bureaus, Equifax, Experian, and TransUnion, once every 12 months through AnnualCreditReport.com.
Checking your credit reports and credit scores gives you the information you need to make changes, if necessary, and identify any errors that need to be corrected. With a clean credit report and good credit score, you will have access to more affordable credit now and in the future.
This can save you hundreds to thousands of dollars if you are thinking about taking on some form of financing in the new year.
2. Evaluate Your Debt
Another smart resolution for the upcoming year is taking a close look at your current debt. Having consumer debt, including credit card balances, personal loans, student loans, or a mortgage isn’t necessarily a bad thing. However, interest accruals on these debt balances can add up to a significant amount over time. You could also be potentially hurting your credit score.
Look at what you owe and the interest rate on each debt, then determine what might be available for extra payments. When paying extra is not a feasible option to reduce your debt load, consider alternatives such as a debt consolidation loan or debt relief program for additional assistance.
3. Work on Your Budget
Another important financial resolution that will add money to your wallet is committing to working on your budget. Figuring out what money is coming in and where it’s going every month can be an enlightening process.
If you’re noticing that you don’t have as much as you’d like to set aside for retirement, investments, or savings, looking at your budget can reveal where you may be able to cut back or reallocate some of your spending.
Budgeting doesn’t have to be difficult, though. There are a handful of money management apps, websites, and desktop software programs to make the process a breeze.
4. Increase Your Savings Amount
Boosting your savings balance is a beneficial addition to your financial New Year’s resolution list. Having a well-funded emergency savings “bucket” allows you to pay for life’s unexpected bills more efficiently. When a major car repair, medical debt, or other large financial need rears its ugly head, you’ll know that you are better prepared to handle the added cost.
In addition to a regular savings account, you may also think about what you can do to increase your mid- and long-term savings buckets. This may include increasing your retirement plan contributions by a percentage point or two or starting an investment account that can be used to grow your wealth over time. Think about your financial capability each month and create a plan for increasing savings in the new year.
5. Save Money Automatically
One of the simplest things you can do in the new year to set yourself up for financial success is to set your savings on autopilot. This means creating a systematic plan that transfers money either directly from your paycheck or checking account into a savings account each month without you having to lift a finger.
Not only is this easier to manage month to month, but systematically saving money allows you to pay yourself first. Instead of waiting until all the bills are paid and then transferring what’s left over into savings, you already know that you’ll be saving X amount regularly. Sit back and watch your savings accumulate in no time.
6. Set Bill Payments to Autopay
When it comes to your bills, having a system of automatic payments is just as important as saving money. Being late on a bill or missing a payment altogether costs you more in the long run; not only are you penalized with late fees, but your credit may also take a hit. The combination of these consequences can be detrimental to your overall financial picture.
To avoid this financial blunder, work through your bank, credit union, or directly with your creditors to establish automatic transfers to pay what’s due. You may also want to set up calendar reminders or use a budgeting application such as Qube Money to ensure you’ve got enough funds in your account to cover automatic payments each and every time.
Most financial institutions allow you to do this for free and many will even provide you with additional discounts and charge less fees for setting up autopay versus paying by check or online manually.
7. Add or Adjust Insurance Coverage
Evaluating one’s insurance coverage is a chore many people understandably shy away from. No one really wants to talk about the worst-case scenario in which insurance would come into play. However, it is one of the most crucial aspects of a sound financial foundation.
If you’re unsure where to start with insurance, schedule an appointment with a licensed insurance agent to discuss the details of your current coverage and additional options you have.
Questions to ask yourself when evaluating your insurance coverage:
- Do I have homeowners, renters, auto, life, or other supplemental insurance under the same company umbrella?
- If not, will “bundling” these packages reduce my monthly costs while retaining the same coverage?
- How much does it cost to add comprehensive coverage if needed?
- Have I had valuable items in my home appraised to ensure my insurance covers them in case of fire or theft?
- How does my insurance company handle claims of lost jewelry, artwork, or similar items?
It is worth looking at your health insurance plan to ensure your coverage there makes the most financial sense too. If in doubt, speak to a health insurance agent at the company that insures you. Captive agents work exclusively for one company and may have the ability to lower premiums and make minor adjustments to your plan.
8. Increase Your Income
For many people, coming up with the extra cash to manage their financial resolutions is not an easy task. Whether it’s due to an entry-level salary or a significant amount of unforeseen financial obligations each month, saving money may seem like a far-fetched dream.
In the upcoming year, focusing some attention on how to generate more income may be the answer. The gig economy is alive and well, offering opportunities to earn more on a part-time or full-time basis for just about anyone.
Online platforms such as Fiverr connect those looking to hire freelancers for a myriad of jobs with qualified contract workers. Mobile apps also may make it easy to use your self-taught handyman or keen businesswoman skills. Using your vehicle can also help you make a few extra bucks in a hurry.
Think about the skills you have to offer to the masses and the time commitment you’re willing to make to get started creating more income for yourself in the new year.
9. Maximize Your Rewards
Finally, the new year presents a great opportunity to seek out opportunities to maximize your cash flow. One of the easiest ways to do that is through credit cards and other loyalty rewards programs. If you have a credit card that offers cash back or travel rewards, check in on what is offered for purchases and try to plan your spending around these bonuses throughout the year.
If you don’t have a rewards credit card, consider your options for getting one that fits your rewards preferences and your spending habits. Cash back and travel rewards can add a few bucks to several hundred dollars to your cash flow over the course of a year.
Final Thoughts on Making Financial New Year’s Resolutions
Making the decision to change your financial habits in the new year is a smart move but attempting to tackle it all isn’t the best plan of attack. Instead, focus on the things you can easily and quickly change and prioritize your resolutions based on what you want to see for yourself in the future.
New Year’s resolutions are not everyone’s cup of tea but setting financial goals for yourself and your family is an essential part of leading a satisfying life. Think about your priorities when it comes to your money then implement the strategies listed above as you see fit.
Taking one small step toward a healthy financial life can make a world of difference for the next 12 months and beyond.
