As we get closer to the end of another year, many people start to think of things they want to accomplish in the next year. Some people set a resolution to exercise more and lose weight while others want to start a new hobby or kick a bad habit. No matter what you decide to do, you should make sure to consider making some sort of financial resolutions for yourself. If you don’t have a clear idea of where to start, here are a few examples of common financial New Year’s resolutions.
Pay Off Debt
A study conducted by the National Retail Federation predicts that Americans will spend way more money this holiday season than the one previously. According to this study, “Consumers say they will spend an average of $1,007.24 during the holiday season this year.” Given this statistic, there is a chance you may be facing some debt going into the New Year. If you are, one of the first goals you may want to set for yourself is to pay off your debt. The reason why this should be one of the first resolutions to check off your list is because it lifts a major weight off your shoulder and it will feel amazing knowing that you no longer need to stress about debt.
Make and Stick to a Budget
A common financial resolution people make for themselves is to make and stick to a budget. This is a great way to keep track of your spending and, in turn, save more money. There are many ways you can go about making a budget; you can make yourself a spreadsheet and write out your daily spending or get a tracking application for your smartphone or tablet, whatever is easier for you. If you consistently track your daily transactions, you should be successful.
Go on a “Cash Diet”
Although it sounds weird, this is a very common financial New Year’s resolution. Just like going on a regular diet where you limit what you eat and drink, you may want to try limiting how much money you plan on spending each week. The best way to do this is to pick a certain cash value, typically $50-$100, and see if you can live strictly off that amount. You may go for a few weeks or a whole year, it just depends on how long you think you can go. By being mindful of how much money you are spending each week, you have a better chance of becoming “financially healthy”.
Create an Emergency Fund
A financial resolution that many people forget to make is an emergency fund. Having an emergency fund is probably one of the most important resolutions you can set for yourself. The reason why this is so important is because unexpected expenses occur more than we think, especially as we get older. Unfortunately, many of us are not prepared to deal with these issues if they were to ever rise. Even if you are certain that nothing will ever happen to you, it doesn’t hurt to over-prepare.