So we all do it, we bought some awesome gifts for friends and family, went to some parties, and had a great holiday. You’ve finally made it through another holiday season and now you’re looking to make some financial resolutions for New Years.
The good news is your financial year is just starting over too, which makes the new year a great time to take a look at your financial health.
Adopt these 6 New Year Finance Resolutions this year:
1. Start to Manage Your Debt
This one is one that everyone says in every finance article ever, but it really is very important. Paying off your debt means you aren’t paying interest on it. This will save a massive amount of money in the long run by negating the amount of interest you are paying on your debt. Less debt is less interest which leads to a happier, wealthier you.
There’s also some psychological benefit to paying off a portion of your debt. When you pay off a small amount completely, you can start to see the dent you are making in your debt. It can be really healthy to pay off a single debt before moving to making large payments on other cards/accounts as you can start to see the progress you’re making. You want to see yourself succeed. What better time than the new year to start off on a great foot!
Of course we all know these things. But why is it so hard? The key is to focus on your long-term goals with simple actions every day and to pay it off little by little. Use any extra money that comes along toward paying off your debt or put it in savings. Be wise with your money every day and focus on the end goal – to be debt-free.
2. Know your Credit Score
This goes with your last one. Your credit score is a really important number that tells companies how trustworthy you are in paying back your debt. This number is affected by many different things, but there are sure-fire ways to keep it on the rise, like paying your bills (all of them!) on time, keeping your debt/limit ratio at less than 60% (making sure you don’t max out your cards!) and making sure you don’t have too many sources of debt. This is where paying off debt goes a long way!
3. Budget, Budget, Budget
Many banks will do this for you by monitoring and grouping your purchases together in your account overview. I use excel or a similar spreadsheet organizer to help me stay on track each month. There are some great resources to help your create a budget.
Resources like mint.com gathers all of your accounts and puts them into one place for you. It then helps you look at your overall financial health and helps you figure out how to get back on track. It’s truly one of the most useful sites out there currently. I’d highly suggest getting started there. You can even set it up to send you reminders about upcoming bills, helping you up your credit score.
5. Cut Unneeded Expenses
This one is another obvious one, but a really hard one for people to do. Don’t eat out if you don’t have to, don’t get that coffee in the morning, skip that evening of drinks once in awhile. You can save on clothes by shopping more wisely at thrift stores.
The less money you are spending, the more you can pay off in the long run. Once you’re completely caught up and in a healthy financial situation, these things can re-enter your life in a way that is healthy.
6. Stop Stressing
Getting your finances in order can be a scary and stressful endeavor. Much of it happens over long periods of time, and can result in you sacrificing things that you really enjoy. But remember, you’re working towards a new, healthier you in the long run, and that is something awesome. So don’t worry! If you slip up and you blow your budget, there’s always next month. The whole point of getting your personal finances on track is to help reduce your stress, so take a deep breath, know it’s all going to be okay, and move forward.
Following these 6 New Year Finance Resolutions can help you move towards a super awesome new year, both financially and mentally. Setting up good habits in the beginning of the year can help you stay on track. And remember, you’re doing this so you can relax a bit and to kick off your new year right.
Doug writes about Travel, Budgeting, Homebrewing, DIY projects, and Food. Follow him on Twitter @diydoug.
Do you have any New Year Finance Resolutions you think should be added? Share them below!