Best Financial New Year's Resolution
One of the many great things about starting a new year is that it gives you new beginnings. You will have the opportunity to make over your entire life. This includes your finances. There are a number of New Year's Resolutions that you can make regarding your finances.
Start a Budget
You should make a resolution to start a budget. One of the keys to making good financial decisions is to start a budget. A budget will allow you to look at your overall financial picture. You will be able to see exactly how much money you have coming in and going out.
You will be able to see areas where you can improve. You will also be able to find ways to cut out unnecessary spending.
Save At Least 15 Percent of Your Income
Life can throw you a lot of unexpected curveballs. One of the best things that you can do to deal with the curveballs that life may throw you is to save money. You should make a resolution to save at least 15 percent of your income. For example, you make $4,500 per month. You will need to save at least $675 per month.
The best thing that you can do to save is to make automate transfers from your checking to savings every month. There are no risks involved in doing this because if you need the money, then you can just transfer the money back to your checking account. However, you should challenge yourself to keep all of your money in your savings account.
Check Your Credit
If you have not been paying a lot of attention to your credit, then you can make a New Year's resolution to check your credit. You can get one free credit report a year from annualcreditreport.com. Make sure that you take inventory of all of your accounts. Make sure that all of the information on there is correct.
Create a Debt Plan
Many people set a New Year's Resolution to get out of debt. If you have a lot of debt, then you may not be able to get out of debt within a year. However, you can make a resolution to greatly reduce your debt. One of the keys to getting out of debt is to start a plan.
There are two strategies that experts recommend for getting out of debt. You can either pay off the smallest balance first or the account with the highest interest rate. If you pay off the smallest debt first, then you can move on to the bigger ones. Paying off a small debt also gives you a sense of accomplishment.
If you pay off the debt with the highest interest rate first, then you will be able to save a lot of money. Many people struggle with debt because of the high interest rates.
Commit to No-Spend Days
Many people are spending much more than what they can afford. That is why you should set a resolution to have a few no-spend days per month. This is a great way to build financial discipline. There are several things that you can do to survive your no-spend days.
You can prepare meals at home. You can also find ways to entertain yourself for free. Additionally, you can use everything that you have in your home before you buy new things.
Contribute to Your Retirement Account
Even if you are still in your 20s, you should still be saving up for your retirement. If you have not been saving, then the New Year is a great time to do it. You should try to save 3 to 6 percent of your income for retirement. If you have a 401K, then your employer can match any contribution that you make.
Eliminate Bad Financial Habits
Bad financial habits can put you in a hole. You can make a resolution to eliminate bad financial habits. Examples of bad financial habits include eating out too much, splurging on your pets and paying full price for your clothing. If you eliminate bad financial habits, then you will be able to save a lot of money. You should ask your family members and friends to hold you accountable for your financial habits.