10 Financial New Year's Resolution Ideas

Imagine a New Year’s resolution that would help you feel more peaceful, more prepared, and free your mind for good things. Who wouldn’t want that, right?

Committing to improving your financial future can do all these positive things and more. If you commit to just one New Year’s resolution, make it one to improve your finances. We’ve compiled 10 possible financial New Year’s resolution ideas to help you do just that.

Create or Update Your Budget

If you don’t have a budget in place, include it in your new year goals. This is possibly the single best thing you can do for your finances, experts say because it helps you understand where your money is going and see opportunities to make positive changes.

To keep it simple as you begin, you can think of three steps:

• Budget wisely
• Track your spending
• Distinguish wants from needs

Whatever works best for you is a great way to start, whether it’s a spreadsheet, a budgeting app, or just a notepad recording every place your money goes in a month with the amounts. Then you’ll have the information you need to look for trends and make a plan.

See our other blog posts to learn how to create a budget you can stick to and how the  50/30/20 budget rule can help you with budgeting.

Pay Off Debts

If you’re looking for a way to make a BIG difference, focus on reducing and ultimately eliminating any debt you’re carrying.

Experts suggest one of two approaches:

• pay off the highest-interest debt (the most expensive debt) first and continue to the lowest interest, which helps you decrease the amount of money going to interest each month and save money in the long run
• pay off the smallest debt first and proceed to the highest amount, giving you quick wins to keep you motivated and help you see progress

Build An Emergency Fund

Building an emergency fund is like giving yourself a financial buffer or security blanket. This money acts as a cushion, helping you weather any financial storms or emergency expenses without a crisis.

From a broken water heater to a job loss to an emergency vet bill, emergency funds help us weather the storm. Work to save until you have three to six months of living expenses.

Save for Retirement

Saving for retirement is a great resolution to make for your financial future. While the present needs attention, the more you save for retirement now, the better.

One reason is that time allows your money to grow. It sounds strange, but the earlier you invest your money, the less money it will take to provide for your retirement. Simply put, that’s because you’re giving the money more time to earn interest.

If you have an employer-sponsored 401k with matching, experts recommend starting here until you’ve hit the maximum employer matching rate. If your employer matches up to 3%, invest the first 3% you have into this plan. If you don’t have this option, IRAs can also be a good retirement investment.

If you can invest more than your company 401k match, consult with a financial expert or planner to help determine how to best invest your money to meet your needs and reach your financial goals. Check out 10 Tips to Start Saving Money Today for more ideas.

Learn More About Investing

Learning more about investing is a valuable resolution that can pay dividends.

If you are already investing, take time to expand your financial education. Learn more about the kinds of investments available. This will also help you have good conversations with your financial expert, since one great benefit of making investments is getting access to financial help.

When you invest with a major company like Fidelity, TIAA-CREF, and others, you typically get access to both a library of high-quality financial education materials and a financial advisor, often for free. Lean into these resources to expand your investing knowledge on diversification and other topics.

Find a Side Hustle

If you’re looking for a little more cash to help pay off debt faster, a side hustle can be a great option. Paying more than minimum payments is essential to getting out of debt, and every little bit helps.

If you’re a college student, try our 9 Ideas How to Make Money in College.

Consider Debt Consolidation

Debt consolidation can help merge many debts into one payment. It can be a helpful option, allowing you to get out of debt faster and accelerate your journey to financial freedom.

Just make sure to work with a credible organization. Debt consolidation is only a good idea if the terms favor you.

Review Insurance Coverage

This may be surprising, but evaluating your insurance coverage can have financial benefits. You may have had one car insurance company since you started driving, but checking around never hurts – and can keep you from overpaying.

It is also possible to be over-insured, meaning your money could be used elsewhere while maintaining good coverage.

Review your insurance coverage and see what the competition is offering.

Reduce Unnecessary Expenses

Reducing unnecessary expenses can be one of the hardest – but most fruitful – steps we can take toward financial freedom.

Even if you have debt to work on, reducing expenses will keep you from adding to it. And that means you can pay it off faster.

It’s important to look at needs versus wants. When you think about making a purchase, be honest with yourself: is it something you need for survival or health, like medication, transportation to work, or healthy food? Or is it something you want but can live without, like junk food, new clothing, dining out, or a manicure?

Start by trying to reduce unnecessary expenses rather than cutting everything out at once. Dine out less if that’s a habit. Cancel some subscriptions you can do without, like Netflix or Hulu. Look for cheaper alternatives, like generic grocery options instead of brand. Be sure to shop around and compare prices when you do decide to make a special purchase.

Automate Your Finances

Another great resolution idea is to automate your savings and investments as much as possible. Once you know how much you can put into savings, have that amount put into the account automatically each month. You can do the same with investment accounts, adding a little at a time directly from each paycheck.

You often won’t notice the money is gone. Yet all the time it will be in your accounts, building a better financial future for you.

Whatever financial goals for the new year and resolutions you decide to make, we wish you success!

FAQs: Financial Resolution Ideas

How can I make $100 a day?

Do an internet search on this question for great ideas – there are lots of them out there for easy ways to pick up a little extra money.

What is the 10% savings rule?

The 10% savings rule is just what it sounds like – set aside 10% of your gross monthly income (before taxes) to put toward savings, retirement accounts, or your emergency fund. This can help you build a savings habit.

What is the New Year’s resolution for saving money?

New Year’s resolutions come in many forms but almost always relate to life improvements. Since saving money is a great way to do that, many resolutions focus on finances. There’s no one resolution for saving, but check out the article above for ideas.