Our financial lives can always use an overhaul, and what better time than in the new year to refresh what’s become stale and unprofitable?
Rethinking how we manage our finances for a new year is one of those things that is worth our time and exploration. All sorts of good things can come from a personal finance reboot, so to speak.
Review Your Budget
One good way to start to rethink your finances is to take note of how you spend your money.
Learn how to take small financial steps that lead to big gains. Jot down, in a notepad, every penny that you spend on everything from the essentials to entertainment.
Being aware of where your money goes is much like a dieter looking at the scale to assess the weight they are losing. The only difference is that if you make adjustments to your frivolous ways of spending, your money will grow and you have everything to gain from that.
So for the New Year, a strong resolution is: gain money, not weight.
Set Specific Amounts to Save
No matter how dreaded the task may seem, learn to set specific financial goals such as contributing X amount to an emergency fund. This is a practice that pays off in the event of unforeseen expenditures.
Those who start the year setting measurable savings amounts for the coming months tend to repeat this smart practice each year and end up better off financially than those who don’t.
Resolve to set financial goals that are attainable and measurable, so you can protect yourself from financial storms.
Automatically Pay Yourself for Your Future
You can automatically set aside a percentage of your income, and this is a good way to contribute to any savings towards a home or car, retirement, 401(k), or college fund. Make it a habit to pull ten percent of your income out and pay yourself just like you would any bill. With discipline, your financial future may look brighter before you know it. So here’s a resolution: set up an automatic withdrawal from your bank account to an investment account. You will pay yourself automatically, and you probably won’t even notice that the money has left your bank account.
Switch Banks
With the onset of mobile banking and the use of apps, one suggestion is that you switch to a financial institution that provides optimum services and tools for your personal financing. The new year could be a prime time to do so.
If finding a bank that offers online personal financial management (PFM) tools helps you budget wisely and learn how to make your money work better for you, then that could be a New Year’s resolution worth looking into.
Resolve to Make a Resolution
More important than any single financial New Year’s resolution is the commitment to taking charge of your finances. Whatever resolution you make will be better than ignoring your finances altogether.
Once you get in the habit of paying attention to how you use your money, you may find that you actually enjoy managing finances, rather than dreading it. An easy way to get started is to write down three improvements you’d like to see in your finances, such as income, savings, paying bills on time, and so forth. Then think about the specific steps you would have to take to make those things happen.
Before you know it, you’ll be way ahead of the financial game.
At the end of next year, you’ll look back and congratulate yourself for making New Year’s resolutions that are practical and can shape your future.