When it comes to money, setting New Year’s resolutions for yourself is easy, but committing to and following through with those resolutions is a completely different story. This is why it is important to set realistic and achievable financial goals for yourself. There is hardly a quicker way to shove those New Year’s resolutions aside than to realize that they are unattainable or that you have set the bar so high that only Warren Buffett himself could achieve them.
Here are a few ideas for money-saving New Year’s resolutions that are set to reasonable levels and thus promote continued progress throughout the year.
Become debt-free
Whether this is a realistic and attainable goal is really dependent upon your financial and debt situation. How heavily you are in debt, what type of debt you hold (credit, car loan, mortgage, etc.), your income level, and the interest rates pertaining to your debt can all play into how quickly or how successful you are in becoming debt free. Start with reducing credit card debt first since it will likely have the highest interest rate. Smaller debt amounts are also good spots to begin so that you build a little confidence by crossing them off your debt list, leaving you to focus on more problematic debt issues.
Make extra bond payments
Resolving to make an extra payment or two toward your bond can be a great way to start the year. By making an extra payment each year, not only are you reducing the time and amount it will take you to pay off your home, but you will be reducing the amount of interest those greedy banks receive.
Start a rainy day fund
If you don’t have one already, starting an emergency fund can be a good New Year’s resolution. You never know what tomorrow might hold when it comes to your finances, but with an emergency fund, you can face the unknown with a bit more confidence.
Invest in your retirement
It’s never too early to start planning for retirement – and these days it’s hard to count on anyone but yourself to do it. Setting aside money for the future to the path to a financially secure retirement.
Understand your investments
It is amazing just how many of us hold investments that we know little about. Many of us associate understanding our investments and financial situation with knowing what investments we own or how much we’ve contributed. Commit to further understanding where that money is invested.
Build a budget
Starting off the year with a budget is an easy resolution that can be completed while watching television or soaking in the tub. Your budget doesn’t have to be in a fancy spreadsheet with graphs and charts. A simple, hand-written list of expenses and incomes can get you started, and can be expanded later if needed. The hard part of this resolution is committing yourself to watching, modifying, and adhering to your budget over the course of the year. Consider putting your budget in an easy to see place like your refrigerator or computer desktop so that it will be a constant reminder of your financial goals and your commitment to those goals.
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