When thinking about your New Year’s resolutions for the coming year, don’t overlook the area of personal finance. This is the ideal time to set some new goals and form some helpful new habits to help you improve your financial situation. Your finance-related resolutions should be customized to your own circumstances. The following are five New Year’s resolutions that you might want to make to improve your financial situation.
1. Create a Budget
One of the simplest ways to take control of your personal finances is to create a budget. Most people don’t practice this, making it extremely difficult to control their spending. When setting up a budget, it’s important to be realistic. Start with essentials such as mortgage payments or rent, car payments, groceries and utilities. Don’t forget to consider entertainment and even a few impulse purchases. You may have to adjust your budget a few times before settling on one that’s practical and realistic.
2. Keep Track of Your Spending
Tracking your spending goes hand-in-hand with having a budget. If you don’t know how much you’re spending, you’ll never know whether or not you’re sticking to your budget. An easy way to do this is to get an app to track your spending. This will alert you to any areas where you may be careless about your spending. Perhaps, for example, you tend to make impulse purchases when you visit certain websites.
3. Increase Your Income
There are really only two ways to improve your finances. You can either cut your spending or increase your income. Ideally, you should be looking for ways to do both. Don’t overlook possibilities for making more money, though. After all, you can only cut back on spending so much. Consider part time, temporary or freelance jobs to bring in some extra dollars. Another option is to get training in a field where you can earn a higher salary.
4. Save Money
If you’re not saving money, this should be near the top of your list for New Year’s resolutions. Don’t make the typical mistake of thinking you’ll start saving when you can afford to. Even if you’re just barely making ends meet, it’s highly beneficial to start a savings plan. Even if you can only put aside a few dollars per week, you’ll be forming a powerful habit that moves you in the direction of greater prosperity. Resolve to put aside the first 10 percent of your income each week for savings.
5. Make a Plan to Get Out of Debt
It’s hard to feel like you’re in control of your finances when you have debt. Even if your debt feels overwhelming right now, start working towards paying it off. Focus on high interest debts, such as credit cards, first. If necessary, consult with a financial advisor or a credit counselor to help you make a plan to get out of debt.