There’s a lot of discussion over whether it’s worthwhile to make resolutions. According to a YouGov survey, only 7% of Americans reported that they stuck to all of their 2020 resolutions. But the process of making financial New Year’s resolutions is a healthy way to reflect on what you accomplished last year and power up your 2021.

Before You Start

Most financial resolutions are abandoned because they’re too broad. For instance, “getting rid of debt” is a worthy goal. So is “I want to save more money.” But these are broad goals with no concrete strategy for how you’re going to do it.

Your financial goals need to be specific, measurable, and achievable. Rather than setting broad financial resolutions, break them down into snack-size goals.

A factor unique to this year is that we are still in the middle of a pandemic. Finding alternative streams of income and building up a cash reserve has become critically important.

Let’s look at four financial New Year’s resolutions and how you can achieve them.

1. Build Up My Emergency Savings

An emergency savings account saves you from going into credit card debt to pay for emergency expenses. As we enter almost one year of pandemic living, Suze Orman recommends that people put aside a year’s worth of expenses into a savings account. This is not realistic for most people, but you can start with what you have.

How you can achieve it:

  • Set a goal of how much you will save each month and work yourself up to three months’ expenses. For instance, let’s say you commit to saving $36 from each paycheck. You’ll have close to $1,000 by the end of the year.
  • Bankrate says that most emergencies cost around $3,500. You’ll need to save $135 from each paycheck to reach this target.
  • Talk to your HR staff and ask how many ways you can divide up your paycheck. Request that a portion is sent directly to your emergency savings account.
  • When extra money comes into your hands, put it into your emergency savings account.

2. Pay My Bills on Time

Paying your bills on time improves your credit score. A good credit score helps you access the most favorable lending terms.

How you can achieve it:

  • Automate. Take advantage of all autopay options. Or, download a fintech app that will automatically transfer money from your paycheck to your bills.
  • If you prefer to maintain more control, set up a recurring reminder on your smartphone or desktop. Arrange to pay all your bills on the same day, whenever possible.

3. Find Alternative Streams of Income

One thing that everyone learned is that your paycheck can quickly disappear. Even if you’re still receiving a salary, creating additional income streams will help you reach your emergency and retirement savings goals. You’ll also be able to pay down the balances on your credit cards if you need them.

How you can achieve it:

  • Identify your skills and talents.
  • Look for freelance platforms that are hiring people with your skills.
  • Take advantage of social media channels to market yourself.

3. Reduce my Monthly Expenses

Reducing your expenses will increase the amount of money you have for emergency and retirement savings. It will help you achieve the financial New Year’s resolutions you make in these areas.

How you can achieve it:

  • Commit to an expense tracking method, preferably with a financial app.
  • Set aside one hour every three months to review your expenses.
  • Contact your service providers and negotiate a better rate or switch companies.
  • Identify subscriptions and memberships that you no longer use. Cancel them.
  • Never go to the grocery store without a list. Purchase only what you will use. Take advantage of sales and coupons.

Bottom Line

Making financial New Year’s resolutions is worth the effort as long as you plan how you can achieve them. Remember to keep them bite-size and measurable.

If you are burdened with high amounts of credit card debt and are struggling to make your payments, or you’re just not seeing your balances go down, call Timberline Financial today for a free financial analysis.

Our team of highly skilled professionals will evaluate your current situation to see if you may qualify for one of our debt relief programs. You don’t have to struggle with high-interest credit card debt any longer.

Call (855) 250-8329 or get in touch with us by sending a message through our website