Financial Resolutions That Makes The Most Sense

Financial Resolutions That Makes The Most SenseAs you head on to the new year, you might find yourself putting together another set of financial resolutions you vow to stick to for 12 months. More than promising to start eating healthy, hit the gym, start running, or even using that bike you’ve had for a while, your finances could also need a new direction for the year.

More often than not, these resolutions are done out of habit at the start of every year. Some people also put together these money resolutions because they went through a challenging time in the past year. As they try to avoid getting into the same situations, they resolve to manage their finances better. While for others, they simply want to achieve their financial goals much faster.

Whatever the reason is, these financial resolutions needs to make sense and be in line with your goals in life. You cannot just think of random things you will include on your list or goals you heard other people are aiming for. It has to be personal and give you the chance to make improvements in your personal finance journey.

If you are planning to put together a list of resolutions that aims to help you financially, here are a few thing to consider.

Be more conscious about online security

Technology has come a long way in advancing several industries including the financial sector. For one, it is now a lot easier to manage your bank accounts. You simply go online and check your fund balance. You can also shop in the comfort of your own home. For payments, you can also do most, if not all of it online without the need to fall in line.

However, together with progress and convenience comes a downside as well. For one, online scams can be a huge blow to your finances. It can wipe out your bank account and negatively impact your credit score as well. The best thing to do is be more proactive when it comes to online security. A lot of institutions are being affected including Equifax that got hacked in 2017.

One of the first things you can do is put in harder passwords for your online financial accounts. The more complex the password is, the harder it would be for scammers to guess it. You also need to make sure that you visit legitimate websites and avoid downloading suspicious files on to your devices. These can have a virus that can do a lot of damage when it gets a hold of sensitive financial information.

Commit to a savings plan

One of the best financial resolutions you can ever make is committing to a savings goal. This can help you reach your goals a lot faster or simply keep you on track. The problem with most savings goal is that you end up losing interest early in the game because of the sheer target amount. The best thing to do is break the amount into smaller targets. This might even be the reason why CNBC shares that half of Americans have nothing saved for retirement.

If you are looking to save $2,000, that would seem to be a big amount at the start of the year. You can easily lose interest and focus. However, if you split that in half, that is only $1,000 half a year. If you split that even further, it would come out to $500 for 3 months and about $167 every month. Between $2,000 and $167, the latter seems a lot easier to plan for.

Start a college savings plan

As soon as you start talking about financial resolutions, it involves a lot of planning for the future and this should include your children most especially for their educational needs. Higher education does not come cheap and cost of attendance usually goes up year after year. According to College Data, average in-state public college and private college is around $25,290 and $50,900 respectively.

That is a lot of money for young people wanting to go to college. The usual route of would be to take out student loans to pay for school. They then have to pay for it for years to come after they graduate. There is a good chance that you are also paying for one yourself. You should know that student loans are quite hard to shake off and sticks with you for a long time. If you can help your children get a better start with their finances after college, now is the best time to do that.

Credit card management

A big part of why you want to improve your finances is because you could be struggling with debt payment. There are a number of reasons why you could be in debt and usually, your credit cards are involved. From having the ability to pay for things you cannot afford to miss payments and being hit with fines and a lot of other charges, your credit card can quickly put you in serious debt.

This is the reason why a lot of people includes credit card management in their financial resolutions. There are actually a few ways to help you manage your card debt. One of the most important things you need to learn is when not to use your card. There are a lot of temptations when it comes to credit card purchases and it boils down to repayment ability.

If you do not have the ability to repay back the amount at the end of the month, better think twice before swiping your card. Minimum payments could help you stay current with small manageable amounts. However, you end up paying a lot more for interest over time. That amount could be better used for other financial goals.

Learn a new money-saving skill

As you start the new year, you can try and learn a new skill. This is one of the financial resolutions that can be your jump-off point not only in earning a lot more but it can actually allow you to cut costs as well. Just look at all the things that you pay money for around the house and you will be able to pinpoint skills.

If you seem to spend a lot of money in ordering take-out food, it might help you save money if you start learning how to cook. You can buy and cook in bulk over the weekend so you just reheat all throughout the week. You can also try to learn DIY repairs at home so you do not have to call for everything and anything that needs repairs.

Be serious about your reserve funds

Money and budget resolutions also need to protect you from unexpected challenges that you could face all throughout this year.  This is why you need to make sure you include your emergency fund in your plans for the year. It will be your financial cushion in case you encounter emergencies such as being hospitalized or even losing your job.

There are a number of ways how you can put together sensible financial resolutions that can help you throughout the year. You just need to make sure that you think about your targets so you do not waste time with other resolutions that will not really help you achieve your goals.