Financial Resolutions You Can Actually Keep
January 29, 2019 |
Welcome to 2019 — the year we get our finances in order!
Every year, millions of people make resolutions to get control of their finances or save for significant purchases, such as a buying a house, attending college or taking a trip around the world. But after January, those aspirations go the way of best intentions, as life gets in the way and financial resolutions fade away.
But not this year. This year we’re going to help you make financial resolutions you can actually keep. Let’s make this year the best one yet for your finances!
1. Understand your finances.
Do you know how much you spend each month and how much you’re actually saving? Do you know when your bills are due? Do you know how much debt you’re in?
This year, schedule some “me time” to go through your finances. First, make a list of all your bills (rent/mortgage, utilities, medical bills, credit cards, loans, student loans, etc.) and when they’re due. Next, make a list of your income (pay checks) and their frequency (weekly, biweekly, monthly). This should help you get a bird’s eye view of your finances.
Do you have multiple banks or credit unions? Retirement accounts? 401(k)? Money tucked into your mattress or up in a crawl space? What kind of interest are your accounts earning — or costing you? Get a good idea of where your money is and where it’s going. This will help you get a start on putting your financial resolutions in action.
2. Track your spending — with an app.
If you look at your credit card statement for the first time and your eyes pop out of your head at the amount of spending you do each month, you might want to consider downloading a spending tracking app. Old school expense trackers used to track spending by putting receipts into an envelope. Now you can use one of the many apps available for smart phones.
There are dozens of great ones out there that can link to your financial accounts. Check out this review of 12 Free Apps from Forbes to get started. You can track what you spend, set budgets for spending categories, even help you manage your credit score. So, after you’ve taken the time to understand your finances, rein in your spending and reset your financial brain with an app that will do all the work for you.
3. Set up autopayments.
In general, late charges are universally despised. If you’ve been paying your bills manually — either with electronic payments or actual, old school checks — it’s easy to forget a payment due date and incurring a late charge. Don’t fret. There’s a really easy way around it.
Sign up for autopayments. Most recurring bills have the option to be paid automatically with autopayments. It only takes a few minutes and can save you serious cash in late fees, which you can put to better use (see #4 and #5). For the few remaining bills that can’t be paid via autopayments, set monthly reminders in your phone three days before the bill is due. This’ll help you remember when to pay those bills and avoid late charges.
4. Pay down your debt.
According to Experian and the Brookings Institution, the average American has nearly $7,000 in credit card debt and $50,000 in student loan debt. Add in mortgage and medical bills, and it’s not surprising staggering amount of debt Americans carry every year, which continues to grow.
But not you. Now that you have a good handle on your finances, a helpful app to track your spending and scheduled autopayments, you can focus on paying down your debt. Start with paying down the debt with the highest interest rates, which are usually credit cards. If you have multiple credit cards, pay off the ones with the highest interest rates and limit yourself to the credit cards you actually need. Next, using your helpful app, see if you can afford to increase the amount you pay down on your remaining debt. Remember, paying the minimum amount do is only treading water—you want to pay more than the minimum due to make progress.
If you have a student loan or mortgage, see if you can afford to make an extra $50 payment a month. Even a small increase in payment can help you remove those heavy debt burdens down faster. Before you know it, you don’t have to think about them anymore.
5. Get real about saving.
It might seem hard to save when you still have debt, but saving has never been more important. Most people in this country don’t have enough saved to cover an unexpected bill. But that’s not your story. This year, you’re going to get savvy about saving. If you’ve followed these resolutions so far, you should know exactly how much you can afford to save each month. And a little something is always better than a lot of nothing.
Now that you’re on your way to financial order and savings growth, here are some products to help you achieve your goals, whether their short-term or long-term.
- IRA account: start planning for your future with a 2.75% APY Dime IRA. Pick your term 17-Month IRA CD or 30-Month IRA. For more details.
- Money Market accounts: build your savings while maintaining liquidity. For more details.
- CDs: earn a great rate with the flexibility you deserve. Open a Dime 2.45% APY 13-Month No Penalty CD today. For more details.
These kinds of accounts not only help you save in the future, but they also help cover you for the unexpected. Whatever you can afford to spend, find the right kind of account to put it in and watch your savings grow. Trust us, you’ll feel a lot more secure once you’ve got a solid savings.
If you can walk through these five easy financial resolutions, and work towards keeping them this year, you’ll be in excellent financial shape for the future. But even if these steps seem a little too daunting, the experts at Dime are here to help you. Speak with a Dime financial expert anytime you need help or to plan your financial goals at 1-800-321-DIME (3463).