Financial Resolutions For 2020
Getting your money in order can do so much for your wellbeing. It will help you sleep better at night. It will help you feel more in control of your future. It will help you feel less like life is screwing you over—which many of us can feel when we’re working ourselves to the bone and for some reason just can’t save money or put anything in a retirement account or afford a decent vacation. But you likely can do all of those things if you just sit down, assess your financial health and habits, and make some changes.
The New Year can be the ideal time to recommit yourself to better money habits. A solid financial situation isn’t always the result of some incredible influx of cash—like through winning the lottery or writing a best-selling novel. Many individuals out there who are enjoying a comfortable financial situation are able to do so because of daily habits that they’ve stuck to for years. Those little choices add up. That impulse control and that attention to detail can make a world of a difference in your checking and savings account every couple of years.
You probably tell yourself you’ll be better about money in this way or that way. But, when the moment comes along, you give into temptation. You do what feels the easiest (or the most enjoyable) at the time, knowing that, in a way, you’re stealing from your future self. Nobody said that financial reward came without a little sacrifice. It may be time to exhibit a bit more discipline. This can be the year that you behave, financially, in a way you’re proud of. You could join that group of individuals who doesn’t panic about surprise expenses and worry about how they’ll ever…save for retirement or…own a home. Here are some excellent financial resolutions for 2020.
Research big purchases better
Don’t throw money at the problem. Yes, researching, digging around, calling a friend, and doing your due diligence can be a pain. But when it comes to big purchases, doing your research can save you hundreds (or thousands) of dollars. Though it’s tempting to just buy the first dining room table or lease the first car you find and get some free time back, don’t do it. Investigate. Shop around.
Only dine out for special occasions
For the record, date night counts as a special occasion! But, feeling a little tired and too lazy to cook on a Thursday night doesn’t count as one. Neither does “really craving sushi.” Cook at home unless the occasion truly calls for it. Obviously you’re going to your best friend’s birthday dinner and obviously you and your boo deserve a night out sometimes. But really ask yourself, “Do I need to order in/dine out tonight?”
Party a bit less
If you’re big on going out, then you’re likely spending a lot on entertainment each month. Alcohol at bars, restaurants, and clubs is quite expensive. And the moment you go over the limit, you have to pay for an Uber, Lyft, or cab. Simply having that second cocktail could cost you another $13 on the cocktail itself (after tax and tip), and another $20 on the Uber home. If you can limit yourself to just having a drink when you go out (or whatever your limit is)—or not drinking at all—you can drive yourself, and skip the cab fare.
Look into refinancing loans
You may have some loans you’re paying off and have been paying off for a while, like student or mortgage loans. But, have you checked the rates out there? There might be much better offers. It’s always worth it to sniff around if you hear of rates dropping. You may be able to refinance your student loan and save thousands of dollars in the long run.
Align your credit card with your lifestyle
Take a look at your credit card situation. If you don’t yet have a credit card, or you only have one that you barely use, it could be time to investigate what’s out there if you’re capable of responsible credit card habits. If you are, then it’s important that you have the best cards for your life and habits. For example, a travel card sounds great but, if you never get around to traveling, is it really for you? If you only get points for travel purchases, is that perhaps a silly choice for your lifestyle? Maybe a simple cash back card that rewards you for regular purchases is the call.
Pay off debts
Before buying that bag, paying for that trip, or even just going out for drinks with your friends, pay off your debts. Sit down and figure out how you pay off those debts quicker, because interest is accruing. If you cooked all meals at home for two months, could you significantly pay down a debt? If you downgraded from that fancy gym membership to a lower grade one, could you pay down a debt? Make paying off debts a top priority.
You may believe you stick to a budget, but do you really? Or is it just some loose numbers in your head you tossed around one night while watching TV? If you consistently save less than you thought you would, then your budget probably isn’t on point. Actually sit down and look at receipts and credit card statements and bills to figure out exactly how much you spend each month, and where you can cut back.
Stick to those budgets
Now stick to those budgets. Don’t just make them a pipe dream. Don’t only stick to them when it’s easy or convenient. Stick to them always. That means that if your friends asks if you want to do dinner and a movie but you already exceeded your entertainment budget for the month, you’re sitting this one out.
Stop shopping as a hobby
Shopping is not a hobby. When your friends ask what you should all do on a Saturday, don’t suggest going to the mall or that cute shopping street. Don’t even suggest window-shopping, because you know you won’t just look in windows. And when they suggest shopping, ask if you can do something else, like go for a hike.
Remove yourself from promotional lists
How many email lists have you subscribed to over the years? Every day your inbox is flooded with a new coupon for this travel site, that jewelry site, that online furniture store, this restaurant, that delivery service, this movie theater, and that spa. Unsubscribe. To them all. You know that they pull you in, and cause you to buy things you weren’t even interested in earlier that day.
Review/cancel auto pays
Are you keeping a close eye on auto pays? Maybe your credit card increased its annual membership fee by $100. Hmm. Maybe you can have a talk with them about that. Or some entertainment subscription automatically boosted you to a premium membership, without really getting your consent. Time to downgrade. You’re not even using all those premium features you’re paying for.
Put more in your Roth IRA
Max it out if you can. Or if you haven’t even started a Roth IRA or haven’t contributed in years, it’s time to change that. Remember that you get a $100 tax break for every $1,000 you contribute. So contributing $5,000 this year could mean $500 you keep in your pocket, instead of handing to the IRS. And your Roth IRA contribution is in your pocket too, technically, it’s just being held by your investment.
Start/use a savings account
If you don’t have a savings account, open one. Shop around and see which bank will give you the best rate. Some may run specials offering higher interest rates to new customers. Now, set up automatic transfers from your checking account to savings account each month. Figure out what you can afford to put in there, and do it so you don’t accidentally spend that money on wine tasting.
Don’t give into peer purchase pressure
You know those friends who always suggest you order one more round of drinks, upgrade to first class, add the salt scrub for “just $40,” dine at the swanky place instead of the perfectly good affordable place. Stop giving into them. Influence the group to make better choices. Or, just stop hanging out with those friends.
Meet with your financial advisor
If you don’t have one, it’s time to get one. If you have one who you’ve been ghosting for five years, it’s time to sit down with her. Talk to her about what you’re making, what you’re saving, and what your goals are. She will have a better idea than you do of how you can best make your money work for you.