January is the time of the year to get your stuff together. While for many, that means cutting back on alcohol and sweets, it can also mean assessing and improving your financial health – not just physical.
Finances are still a new topic for a lot of twenty-somethings, and each of us tends to think of money very differently from our peers. Some of us are used to living paycheck to paycheck while paying off student loans and car payments. Others are adjusting our spending habits to increasing incomes. Some are splitting the bills with roommates, some are purchasing their first house, and others are looking to upgrade their one bedroom apartment to something more “adult”. Some have kids, some have fur babies, and others can’t even imagine taking care of a house plant. But we all could do with a few, pointed goals towards becoming debt-free, financially stable and successful!
Here are a few ideas for the types of New Year’s resolutions you might like to commit to in the coming weeks to up your finance game:
Challenge yourself to save better or spend more responsibly.
If automatic transfers or spreadsheets aren’t your thing, maybe a personal challenge is! For those looking to develop good money habits, there are plenty of creative spending and savings challenges you can utilize or even think up yourself. Some of our favorites include:
- The $5 saving challenge
- The 52 week money challenge
- A shopping ban – this could be one day, one week, one month, or even a year like Cait Flanders did! You could also try a ban on a particular shop or store that’s your budgetary kryptonite. (Like me! Guilty of spending $7 on chocolate from CVS any given weekday, I banned myself from buying snacks anywhere but Snap Kitchen. Good life decisions.)
Get your finances organized.
Discover your net worth: all your assets, minus all your liabilities. Make sure you have the information needed to access all accounts, and know when you can/should or can’t/should not be able to draw money from them.
Find a financial app or system that you like to use to keep track of your income and spending habits (we love Mint!), and develop a routine for monitoring them regularly.
Secure a side hustle.
In need of some extra income? Choose one way to make more money, and then stick to it. Consider: your skills, the amount of money needed, how frequently you need to get paid, and how much time you have to dedicate.
You might choose a “passive” income stream, or take on a second job that requires part-time hours or the ability to work remotely. Side Hustle Nation has 99 ideas to get you brainstorming!
Get serious about your retirement fund.
Have you used an online calculator to see how much money you would need to retire?! Um, it’s way more than you might have imagined. Most of us don’t have enough at all set away for our age group. In fact, one in every three people has a whopping $0 put aside.
So, first step if that’s you? Open an account. (Here are different options to choose from – your employer doesn’t need to offer them for you to start!) Deposit the minimum amount required, if that’s all you’re able, but at least make sure you have an account that is growing interest!
If you already have a savings account, chances are good you could still improve your savings. Your New Year’s resolution might be setting up an automatic transfer of funds into your retirement account every month, or upping that amount that you regularly contribute. Again, using an online calculator is a great way to determine how much you should be saving so that you can relax in your 60’s!
Think rich.
Finance is a somewhat taboo topic – it makes a lot of people uncomfortable, and for many, the terminology around investments or loans remain shrouded in mystery. If this describes you, make part of your New Year’s resolution to get more comfortable with the topic!
As Ash Ambirge says, making money is not as hard as most people make it. Follow motivational Instagram accounts to remind you daily of where you want to be, financially, and that that money is yours for the making. Better yet, find an in-person or online community to help you strive for improvement! That may be a financial blogger that you follow, a Facebook group you participate in, a local meetup group that hosts workshops and lectures, a podcast series you tune into, or even a newspaper you pick up to stay educated. Make money a part of your daily thoughts, and good habits a part of your daily behavior.
Focus on kicking one bad habit.
Everybody’s got one where money is concerned. What is it that you do that you KNOOOWW you shouldn’t, but you just can’t help yourself? Pick only one! Then focus on correcting it in the New Year. What’s your bad habit?
- Is it the impulse purchases you make at the mall on weekends? Maybe make a list of the only things you’re allowed to buy / the max amount you’re allowed to spend BEFORE leaving the house. Or bring only cash to curb impulse swiping.
- Is it those pesky $5 lattes? If you know that the boring advice of skipping fancy coffees pertains to you, figure out a way to spend less at coffee shops without driving yourself crazy. For me, that was nixing Starbucks and not the drinks themselves. By exploring other coffee shops, I now spend less money on the food there, sometimes less money on the coffee, and feel better about spending on small, local businesses.
- Do you get charged for ATM fees regularly? Schedule a time each week to get cash and make it a no-BS part of your routine.
- Is it taking money from your savings account when you over-spend? Determine a better way to manage either your savings account, or your spending habits to ensure THAT DOESN’T HAPPEN.
If the first thing you try to kick that bad habit doesn’t work? Give it a few weeks of effort, and then pivot and try something different until you’re successful.
Do the one thing you’ve been avoiding.
You know how your daily to-do list should start with the big, hairy task that you don’t want to do? The same logic applies here. What financial obligation have you been knowingly neglecting?
- Is that Is it that you don’t have a budget? Get over yourself and create one.
- Have you avoided taking a view of your overall net worth or credit score? Check that ish and face your finances!
- Are you putting off the decision to move back home to save more? The younger you are, the easier it is to stomach. Plus it really does save you so much!
Make that the first thing you start with this year, and the rest of your time will be made more productive, not to mention insanely easier!
Are you committed to improving your finances this year? My goals are to increase the monthly amount I’m contributing to my retirement fund by 3 to 8%, and to open at least one new online savings account to save more aggressively for specific expenditures, like vacation and home improvement!
How about you? Leave us a comment and let us know what your financial resolution will be!
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