7 Ideas For Setting Your New Year Financial Resolutions
Building wealth starts with building good financial habits. Setting these New Year financial resolutions can help you save more, spend your money wisely, and even increase your income. So even if you’ve had a tough year, think of this as your chance to turn your life around and take the first steps toward financial success.
Ideas For Setting New Year Financial Goals
1. “I Will Finally Take My Budget Seriously”
This is the biggest, most important of all the New Year financial resolutions you can make, especially because of inflation. You’re already spending more on rent, food, utilities, and other basic needs. So, you have to plan what you buy and prioritize expenses, so you don’t run out of cash before your next payday.
Financial experts say that the trick to making a budget that really works is to keep it active and current. Don’t wait until the end of the month to do your accounting. Use an app or a notebook to write down every expense, and then regularly check if you’re on track.
If you’re at risk for overspending in one category, then think of ways to cut back on others. For example, if you had to take a lot of cabs this week because of bad weather, then make up for your transportation budget by spending less on food.
2. “I Will Use Cash As Much As I Can”
Cash forces you to stick to a budget because you can’t spend what’s not in your wallet. You can use the envelope system for daily expenses: withdraw the money and divide it between labeled envelopes (groceries, gas, etc).
For expenses that usually require online transfers—like utilities, subscription payments, or even rent—consider auto-debits or moving your funds into a separate debit card. That way, you don’t accidentally spend the money that’s allocated for that expense on something else.
3. “I Will Save Before I Spend”
Instead of saving whatever’s left at the end of the month, put away the amount you want to save as soon as you get your paycheck. You can also arrange for your bank to automatically transfer the amount to a separate savings account.
This is one of the best New Year financial resolutions because you force yourself to save rather than just figure out how to save. It removes the temptation and makes saving automatic. There’s no chance of failure!
4. “I Will Invest In Myself”
There are two components of building wealth: decreasing expenses and increasing income. Since there’s only so much you can do to reduce costs, then it’s even more important to look for ways to build your career and ability to earn.
Think about how to develop your skills and experience. Can you take an online class or a government skills-building program? Can you ask your boss for additional work so you can learn on the job? What talents do you have that you can turn into side hustles or home business opportunities?
Normally you’d say, “I want to take a class, but I don’t have the time.” But this year, your New Year financial resolutions should include making time for personal growth and development.
5. “I Will Practice Intentional Spending”
Intentional spending means making informed decisions about every purchase and getting only what you need. You make every dollar work harder for you, by making sure that you always get real value from what you buy.
The opposite of intentional spending is emotional spending. You buy things on impulse or mood: you’re bored, stressed, or just too busy to think about what you’re putting into your shopping basket.
6. “I Will Not Avoid Important Conversations About Money”
A lot of couples fight about money (in fact, financial disputes and differences are one of the leading causes of divorce). But that’s because they never talked about money until it became a problem.
If you share a life, you share a budget and financial goals. So, if you’re in a relationship, your New Year financial resolutions should include having more honest and productive conversations about how you will manage expenses, divide financial responsibilities, and plan for big purchases and your retirement.
Avoiding these conversations won’t make money problems go away; in fact, it will make the problems worse.
7. “I Will Have A Plan For Financial Emergencies”
Financial experts suggest that you should have a Rainy-Day fund that’s equivalent to three to six months’ worth of expenses. That’s why saving money is really important—even if it means tightening your budget and giving up unnecessary luxuries.
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Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.