New Years Resolutions with Money in Mind

Personal Finances Resolutions for a Prosperous New Year

With each New Year comes refreshed resolve to improve oneself - physically, mentally, and of course, financially.  Despite the overwhelming tendency to abandon resolutions and goals as the demands of day-to-day living take over, a new survey from Fidelity Investments suggests that financial resolutions may have more staying power than others.

Among those respondents who made financial resolutions in 2014, 51% reported feeling better about their money at years’ end, as opposed to the 38 % who did not make a money resolution last year.  Among those who made a financial resolution, 29% reached their goal and 73% got at least half way there.

Despite falling short, there’s no denying that some progress is far better than none - especially considering the long term implications of financial progress like paying down debt, building credit, and boosting savings. 

Take a step in the right direction this year by setting solid financial goals.  Even if you fall short, you’ll still be on your way to a brighter financial future.

Here are some ideas to get you started…

Track Spending.  It’s hard to improve your fiscal future without knowing where you stand in the present.  Commit to tracking all of your spending and all of your earnings in 2015.  Once you have a precise picture of where you are, you can better map out how to get to where you want to be by years’ end.

Reassess Expenses. Reducing expenses, be they required or discretionary, fixed or variable, frees up more money for other financial priorities like funding savings and retirement accounts.  Take an objective look at your spending and make note of patterns of overspending on short-term indulgences that impede the funding of future goals.  Even seemingly “set” expenses like housing can be reduced by moving to a more affordable neighborhood or renting out a room.

Increase Income.  Negotiate a raise, start a side hustle, sell your clutter, etc.  While savings on expenses is finite, the potential for increased income is unlimited.  See what you can do in 2015 to foster additional earning opportunities.  The only way to earn more money is to put more value out into the marketplace, so take action starting today!

Tackle Debt.  Stop deferring your debts and resolve to deal with them head on in the New Year.  Research your options for consolidation, renegotiate your interest rates, prioritize your payments, and follow through so you can stop paying for your past and enter next year with an eye towards the future.

Fund Your Future.  Speaking of your financial future, make a plan to prepare for it in the present.  Build a savings buffer, max out your IRA, enroll in your employer’s 401k plan and fund it to at least the employer-match mark if you have one, and review your portfolio to make sure it properly reflects your priorities and current risk tolerance.

Stay Accountable.  Find a way to stay accountable to your goals.  Too often friends and family members enable continuing patterns of poor financial behavior with peer pressure and justifications.  If you can’t find an accountability partner, try going public with your goals like social media, or using an app or program with incentives to keep you on track.

Even one step forward on a goal leaves you better off than you were before.  Take advantage of the new year to make progress towards a better future!