As we near closer to the end of 2023, it is the perfect time to reflect on the past year and everything that you have learned along the way. Your learnings from the past year can help to inspire you to create the perfect resolution for yourself into the New Year to help create a better you. A great resolution to focus on is your finances, specifically by looking at your financial habits.
Setting financial resolutions can pave the way for a more secure and prosperous future for yourself. Whether you are aiming to save more, invest wisely, or gain better control over your finances, establishing these clear resolutions can help to get you on the right path to achieving your goals.
Check out some ways to make a financial resolution that can be impactful for you as you embrace the new year that is around the corner.
1 – First, create a realistic budget for yourself.
The first step towards financial stability with a new resolution is to create a budget that aligns with your income and expenses. Take some time to assess your spending habits from the previous year and use this information and these numbers to formulate a realistic budget for yourself for the upcoming months.
When looking at your budget, include categories for essential expenses, savings, paying back debt, including credit card bills, and any discretionary spending. If you need a hand with budgeting, you can look into using tools like budgeting apps or spreadsheets to assist in tracking and managing your finances effectively.
2 – Tackle your debt in a strategic way.
Next, review how much debt you currently have. Make it a priority to devise a plan for paying off any outstanding debt. You can start by understanding the types of debt that you have as well as their accompanying interest rates, as well as the minimum payments. Consider looking at different strategies to tackle debt, such as the snowball method which is a popular one. The snowball method involves paying off smaller debts first to help build momentum for yourself and your credit.
3 – Always have an emergency fund.
While you want to erase your debt as soon as possible as part of your new financial resolution, remember to keep some extra money for an emergency fund. Unforeseen circumstances can arise at any moment, so you should aim to set aside a portion of your income regularly into a dedicated emergency savings account. Many financial experts suggest accumulating at least three to six months’ worth of living expenses in an emergency fund, which can help provide peace of mind to you in case anything unexpected comes up.
4 – Never stop educating yourself.
There is so much to learn and keep up with when it comes to finances, so remember to never stop educating yourself. Commit to enhancing your financial literacy by learning about more finance topics such as budgeting, investing, taxes, and retirement planning. There are tons of resources out there to check out, including books, blogs, podcasts, workshops, or even online courses. Deepening your understanding of the finance world will help to get you better equipped to make sound financial decisions.
5 – Invest in your future.
We tend to get caught up in the day-to-day so much that we can forget to think about the future long-term. Explore various investment options to help grow your wealth and secure your financial future. Whether this means contributing to a retirement account or investing in some stocks and bonds, the opportunities are endless! If you want to learn more about your options when it comes to investing, seek guidance from a financial advisor to help create a strategy based on your goals and timeline.