As 2016 comes to a close, it’s a great time to reflect on your successes over the past year. Better yet, it’s the perfect time to start thinking about your financial plans for the new year. 2017 is right around the corner, and if you’re looking for a resolution to get you started, look no further!
Developing new habits, like saving, can be difficult at first. Rather than provide you with just resolutions, we will also offer you some great tips on how to get started so that you’ll be on the path from the get-go.
New Year’s Resolution #1: Create a Budget
Budgeting is the cornerstone for financial success. Without one, it is nearly impossible to determine whether you are living within your means, or if you are constantly overspending. Fortunately, developing a budget is an effective way to get your finances in order quickly and will help you to develop control, and confidence, in your finances. Once you have a clear picture of where your money is going, you will be able to make informed decisions to ensure that you money is allocated to the right places at the right time.
Here are some tips to get you started:
- Track your spending through an app like Mint of PocketGuard.
- Plan for next month’s expenses so you’re never taken by surprise
- Set short-term goals that are easily achievable
- Have a concrete, long-term goal in mind
New Year’s Resolution #2: Pay Down Debt
Don’t let debt get you down in 2017! Paying down your debts, even in small increments, will free up your overall spending abilities–and it will be tremendously gratifying. Paying down your debts will also lead you down the path of financial freedom: Keep your eye on the prize, because there is a light at the end of the tunnel.
Take a look at these great ways to start paying down your debt:
- Pay down debt with the highest interest rate first
- Consider paying more than your minimum payment each month
- Check your credit card balances each month
- Put work bonuses towards your debts
New Year’s Resolution #3: Spend Less
Perhaps the simplest way to get your finances in order for the upcoming year is simply to spend less. Paying attention to when you’re splurging on an item you want, versus spending money on something you need will help you to be cognizant of your habits. The better you understand your spending habits, the better chance you’ll have to save more money in the upcoming year.
Some tips to help you spend less include:
- Learning the 50/15/5 rule of thumb (Put 50% of your income towards essential expenses, 15% towards retirement, and 5% towards savings)
- Track your spending with a budgeting app
- Pay with cash only
- Be brand flexible
New Year’s Resolution #4: Save More
Once you have a better understanding of your spending habits, you can shift your focus onto how to increase your savings. Staying committed and disciplined is the key to a successful savings plan, as it will ensure that you stay on track. Over time, you will see your account balances grow, which will allow you to pay down your debts, or spend your money on something truly meaningful, as opposed to impulse buys on a regular basis.
Some great ways to help you start saving today include:
- Slashing excess spending
- Automating your savings electronically (Scheduled transfers)
- Consider keeping more money in your savings account, and less in your checking
- Tracking your spending with a budgeting app
New Year’s Resolution #5: Learn More About Finances
Sometimes the most difficult aspect of getting your finances in order is learning about them. Investing, budgeting, mortgages, stocks, and retirement…these are all concepts that people learn over time. Without proper education and guidance, they can easily become a blur. A great resolution for 2017 would be to learn more about each of these topics so that you will be able to make informed decisions and get a head-start on your financial freedom in 2017.
Here are some ways to learn more about the world of finance:
- Attend a home-buying seminar
- Meet with a financial planner
- Start a dialogue with a credit union representative
- Talk to your employer about retirement account options
We all go through stages of feeling like we should open a savings account, spend less, or contribute more to our retirement accounts. With so much on our plates throughout the year, it can be difficult to devote time to our finances. Setting an intention now, by making financial freedom your New Year’s Resolution, will ensure that you are on the right path for success in 2017.
