No matter if you love or hate the idea of New Year’s Resolutions, they’re hard to avoid during the month of January. A part of me feels like you should already be doing what’s best for your finances, regardless of the time of year.
But I also believe that we shouldn’t overlook or downplay any opportunity to get motivated and improve our success. After all, if you take a resolution seriously and it turns into a permanent habit, it could completely transform your life.
In last week’s post, 6 Essential Habits of Financially Healthy People, I covered key behaviors that financially successful people have in common.
But how do you adopt new, healthy habits? Well, making a resolution, which is a firm decision to do (or not to do) something, can be the gateway to forming long-lasting habits. In turn, habits help you accomplish your goals, which are your ultimate desired results.
In other words, your resolutions are important because they can create habits, which are the building blocks of achieving goals.
In this post, I’ll cover 7 financial resolutions that could save you thousands and turbocharge your success. Even if you adopt just a few of them this year, they’ll move your personal finances in a position direction.
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7 Financial Resolutions That Will Save You Thousands
Resolution #1: Eat out less often.
Dining out at great restaurants is something my husband and I love to do. Even though we can afford it, we made a resolution to cook at home for 21 days in a row to start the year.
In general, eating at home is less expensive and it can be healthier. When you cook your own food, you know the exact ingredients in each dish and control your portion sizes. Plus, if you drink alcohol, an impressive wine menu or expensive signature cocktail list won’t tempt you—like it always does for me.
Make a resolution to bring healthy lunches to work every day, make fewer trips to overpriced coffee shops, and to eat out less often. You’ll be surprised how much money you can free up and save instead.
Here’s an example just for lunches: If you often go out and spend $15 for lunch, you could save $10 a day if your bag lunch cost $5 to create. Multiply $50 a week by 50 weeks in a year and you could easily save $2,500 over the next 12 months.
Resolution #2: Go on a spending fast.
Just like skipping restaurants for 21 days helps you save, make a resolution to complete a spending fast. This is a set period of time when you spend money on necessities only, like groceries, housing, utilities, transportation, and insurance.
During a spending fast you resist the urge to buy wants, like clothes, trinkets, gifts, housewares, makeup, or to pay for movies and entertainment. This exercise helps you understand how much and how often you make purchases that you really don’t need, even if you can afford them.
If you’re an impulse shopper, use the tips I included in last week’s post to nip unwelcome buying urges in the bud. Also, be aware of your emotions. Don’t ever shop in stores or online when you’re sad, anxious, or upset because research shows that you’ll overspend. That will only make things worse.
Don’t ever shop in stores or online when you’re sad, anxious, or upset because research shows that you’ll overspend. That will only make things worse.
Instead of focusing on what you want, be grateful for what you already have. And if you do give into an impulse, don’t beat yourself up about it, just return the item if you can.
The money you don’t spend on extras should go in an emergency fund or a savings account you may have earmarked for a short-term goal, like buying a car or going on vacation.
See also: 3 Money Mindset Tips and Tools for Surefire Financial Success
Resolution #3: Use or lose your gym membership.
Most people start the New Year with fitness goals, and I’m definitely in that camp. I realized that I didn’t use my gym membership as much as I planned to last year. Can you relate?
So my recommendation is to use it or lose it. Maybe ditching the expense would motivate you to spend more time outside doing something you prefer, like walking, running, or biking.
You could save the money instead of paying a gym. Memberships typically range from about $50 up to $150 or more per month. Cutting an average gym expense could add up to over $1,000 per year.
Or you could use the money for something that might inspire physical activity, like enrolling in a martial arts class, taking windsurfing lessons, or buying new workout gear that motivates you to get moving.
If you keep your gym membership (like I did), make a resolution to go there at least three times a week. If you’re not using it to reach your fitness goals, it’s time to rethink how to spend the money in a better way.
Resolution #4: Get rid of unused stuff.
We all have unused stuff, like housewares, sporting goods, electronics, clothes, and items in storage that we should get rid of. When my husband and I moved from Florida to Silicon Valley a few years ago, we downsized considerably. But I still have cabinets full of items that haven’t seen the light of day since then.
Join me by making a resolution to unload items that you haven’t used in the past year or two. If you haven’t looked at or needed something within that period of time, it’s likely that you really don’t like it or need it. When you come across something that you actually forgot that you own, definitely consider purging it!
In many cases, when we have too much clutter or feel unorganized, the solution isn’t to get organized—but to get rid of more so you don’t have to manage it. Donations to charity help others and can be a tax-deductible expense.
If you have new items or used stuff that’s still valuable, sell it on sites like eBay, Craigslist, Amazon, Facebook, Swappa, NextWorth, or decluttr.
Finding money is fun. When you sell unused items you can use the money to buy something you really want, or to build your financial security by socking it away in an emergency fund or a retirement account.
In many cases, when we have too much clutter or feel unorganized, the solution isn’t to get organized—but to get rid of more so you don’t have to manage it.
Resolution #5: Check your credit.
The vast majority of Americans have never checked their credit, even though you should review it at least once a year. Your credit is a canary in a coalmine because when it unexpectedly goes down, there’s trouble—namely, the likelihood that you’ve become the victim of identity theft.
A criminal who steals your personal information could use it to open up credit cards, take out a car loan, buy a home, file taxes, or take government benefits in your name without you knowing it. The only way you’d discover the fraud is if a collector contacts you after the thief stops paying or by seeing unfamiliar accounts on your credit file.
In addition to stopping an identity thief in his tracks, monitoring your credit is an important part of building it. Having good credit means you’ll save huge amounts by paying the lowest rates possible for credit cards, car loans, personal loans, mortgages, and insurance (in most states). Plus, depending on where you live, landlords and employers may also be able to check your credit in their approval process.
To maintain good credit or to improve your scores, always pay your credit accounts on time, keep a low credit utilization ratio, and think twice before canceling credit cards.
Make a resolution to check your credit this year. I promise that it’s easier and faster than buying something online. You can review or download your credit report from each of the 3 nationwide credit bureaus (Experian, Equifax, and TransUnion) every 12 months for free at annualcreditreport.com.
Free Resource: Credit Score Survival Kit—a multimedia tutorial about how to check your credit and use smart strategies to build and maintain excellent credit for life!
Resolution #6: Read (or listen to) more books.
Mastering your personal finances and becoming a savvy money manager doesn’t happen overnight. Make a resolution to continue your education by reading at least one personal finance book or audiobook this year.
Of course I recommend my book, Money Girl’s Smart Moves to Grow Rich, which is available as an e-book or paperback at your favorite bookstore. Here are some more great recommendations:
The Truth About Money by Ric Edelman
The Millionaire Next Door: The Surprising Secrets of America’s Wealth by Thomas J. Stanley and William D. Danko
Psych Yourself Rich: Get the Mindset and Discipline You Need to Build Your Financial Life by Farnoosh Torabi
Resolution #7: Take a Personal Money Day.
Sometimes taking time is the only thing stopping us from completing financial tasks like opening up a retirement account, switching to a better bank, or shopping auto insurance. Work and family can get in the way of taking care of our personal finances, even when we have the best intensions.
Make a resolution to take a Personal Money Day within the next 60 days. It’s a full day that you block out to focus exclusively on your money. You commit to working on nothing but your finances!
Make a resolution to take a Personal Money Day within the next 60 days. It’s a full day that you block out to focus exclusively on your money.
The time you take could be on a weekend or on a paid or unpaid vacation day from work. Choosing a weekday is best because businesses and financial institutions that you may need to reach will definitely be open.
I know taking a vacation day for something that you don’t really enjoy is a sacrifice. But if you don’t make a resolution to do something different for your finances, you won’t get different financial results.
Read Improve Your Personal Finances With a Personal Money Day Checklist for more information that will repay you many times over!
How to Make Financial New Year’s Resolutions
Making financial resolutions can get you fired up about creating good habits and reaching goals. But the trick is making them stick for the long term.
I recommend that you choose a few resolutions that mean the most to you, instead of trying out dozens at once. They should move you closer to fundamental financial goals, such as:
Maintaining a healthy emergency fund equal to 3 to 6 months’ worth of your living expenses
Investing at least 15% of your gross income for retirement
Paying down high interest debt as quickly as possible
Having enough insurance to protect your financial assets
Building your credit
Living within your means
Setting goals that are vague or unrealistic, like “get rich” or “pay off all my debt,” may sound good, but they do more harm than good because you can’t control those outcomes. Then you even up feeling disappointed or hopeless when they don’t happen.
You’re more likely to succeed at a few resolutions that are specific and achievable—such as “take my lunch to work 4 days a week,” “check my credit before the end of this month,” and “take a personal finance day by the end of this quarter.”
See also: Pay Lower Interest Rates on Debt and Save Money
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