New Year’s is on the way, so it is time for some money resolution ideas.
As a young adult, it’s essential to get your finances as much in line as possible so that you can live stress-free. Money isn’t always something that people feel comfortable thinking or talking about. But the first step is to push past your fears and take a look at what’s going on.
Here are some ideas for some financial goals you can set for yourself this upcoming New Year that will help you become the best version of yourself:
Create a Budget
Make it your New Year’s resolution to create a budget. This is the first and most important step you should take to start managing your finances well. If you’re interested, we have an article on budgeting so check it out.
A lot of young adults haven’t yet set up a budget because they don’t want to think about or see their expenses. While it can be scary, you need to rip the band-aid off and take a look at what your money is capable of. If a yearly or even a monthly budget seems too overwhelming for you then start small with a weekly budget. And it is not enough to just create a budget and then forget about. We recommend that at the eve of every week or even month go through your budget and expenses and understand your finances. This will help you make improvements for the future.
“If you actually create a budget and resign to spend five minutes a week checking it, then you can end up in the elusive 20% of people who are successful in hitting their New Year’s resolutions.”
Lamar Brabham, CEO and founder of Noel Taylor Agency
Based on your budget, you can also set saving and investing goals to help you more in the long run. The more you get used to planning out and looking at where your money goes, the better you’ll feel.
Learn to Say “NO”
If you have a bunch of acquaintances, you may feel pressured to go out with them for meals and drinks often. Alternatively, you could have family members that want to share in your success and ask for “loans”. And while it is great to treat yourself with your friends or help out family members, you have to learn where to draw the line. Be real with yourself on how your financial situation is and whether or not you feel comfortable parting with your money. Instead of going out on the town with your friends and spending way too much money, suggest having a girl’s night in with mani-pedis, movies, and tasty snacks. Moreover, if one of your family members ask for a loan, write up a contract with them for how they’re going to pay you back. Alternatively, tell them that you can’t afford to give them money at the moment.
There’s no shame in being honest and responsible with your financial situation this year.
Set Financial Goals
When you start fresh with a new year, set some money goals for yourself. What is it exactly that you want to work on this year? And this can be as personal to you as possible. Maybe you want to learn how to create a budget or open a retirement fund or spend less on mindless expenses. Be very clear with yourself what your goals are so that you know exactly where your money will be going.
“When it comes to your financial goals, the more specific you are, the better…create tangible guidelines, like resolving to spend $25 less on groceries each month or aiming to reduce your entertainment costs by a specific percent.”
Whitney Ditlow, a Northwestern Mutual financial advisor
Close Unused Subscriptions
When is the last time you watched cable TV? What about the last time you used your Spotify Premium? Or even your Hulu account?
If you find that you’re using your subscriptions only once in a blue moon or never, it’s time to say goodbye. Even if it’s hard to part ways, the amount of money that you’ll be saving will be so worth it. the subscriptions that are even as low as $5 per month add up to $60 in a year, so be firm and cancel those unnecessary subscriptions. Trust us, it’ll help you in the long run.
Improve Existing Credit Scores
Maybe you have one or two credit cards. And with holiday shopping, the salespeople everywhere are offering deals to save 30% by opening a new store credit card account.
Don’t do it!
Everybody’s financial situation is different. So if you really feel like it’s essential to your life to open a store credit card account, then, by all means, go ahead. But for most of us, doing so falls under the category of “bad idea”. Credit scores are important. And the most important focus is that you’re paying off your existing cards monthly, so the credit people like you. This is an excellent new year goal, especially if you’re a first-time credit cardholder. Good credit score only benefits you. The better your score the easier your financial life will be when it comes to things like loans and contracts.
Create Funds
A great way to stay on top of your bigger expenses for the year is by creating funds for each. Whether you are saving up for a new car, a new house, repaying student loans, banks loans, or even saving up for your retirement, it is best to allot a certain amount of money each week or month to the respective categories. Maybe some days you can only save $1 and on others you can save $10. No matter the amount, just put that money in its right place so you are not scrambling for cash in the last moments.
Discuss Money More
Since finances are so difficult to discuss, the only way to get it to stop feeling like a taboo subject is by discussing it more. See if you have any friends that you can discuss money with. It could be a great way to hold each other accountable for your financial goals. Additionally, if you have a partner, it is so essential to make sure you guys are on the same page financially. Money is the cause of so many toxic fights between couples. Once you start the conversation it only gets easier. Money is a part of life and there is no use in avoiding it.
There are so many different money resolution ideas that you can use to improve your financial situation, but for now start with some of these.
Interested to learn more about finances?
