6 tips for Financial New Year’s Resolutions

Financial New Year's resolutionsOne of the top New Year’s resolutions is always improving one’s finances. Of course, we do a lot of thinking about how people relate to money so we wanted to share a few thoughts …

  1. Be specific with your financial New Year’s resolutions. Instead of, “I want to pay off my debt this year,” restate it to something like, “This year I’ll use $20 from each paycheck to pay off $1000 on my credit card bills.”
  2. Have a good, non-threatening conversation about money. Research shows that it’s the #1 issue causing stress in relationships. First, pick a time when you’re relaxed (maybe a nice dinner). Don’t talk about money if you are HALT: Hungry, Angry, Lonely, Tired. If the time is good, instead of talking numbers, try a conversation starter like, “What was the first big thing you bought with your own money?”
  3. Spend money on making memories, not just buying more stuff.  Happiness research has shown that spending money on experiences reduces stress and increases happiness more than purchasing things. So take a vacation, visit people you enjoy, take a painting class and be happy! Your kids and your parents will also likely cherish time spent having fun together more than another gift or gift card.
  4. Do something each day. You don’t need to make huge changes overnight with financial New Year’s resolutions. In fact, we often sabotage ourselves by making unrealistically big commitments to change. Focus on small changes you can make that will add up over the coming year. A good resource for ideas and motivation is the daily messages from Inspired Savings.
  5. Know where you are now. You’ll feel much more in control if you take an hour or two to know what you have and what you owe. Review your credit cards, bank accounts, investments, mortgage, 401k, insurance, etc. You may be surprised that you’re in better financial shape than you realized. You may also discover some easy ways you could cut back on spending that wasn’t obvious to you before.
  6. Check your credit report. It’s free, won’t hurt your credit score and might save you a lot of money! The official site for your free reports is: annualcreditreport.com. Look for any mistakes. Having inaccurate information on your credit report could lower your score and cost you a lot of money in higher interest rates if you apply for a loan, credit or insurance.