7 Financial Resolutions for the New Year
May 12, 2020
Review 2019 Spending
Before you start planning for 2020, take a moment to go over your financial performance in the past year. You can do this by reviewing annual statements or taking advantage of spending tracking apps such as Mint. Hopefully, you have already linked your accounts to an app like Mint and have access to data about your annual spending, savings contributions, and budgeting abilities. If you have not linked your accounts to Mint, DO THIS NOW, you will be so happy you did.
Look for bad financial habits and brainstorm possible coping mechanisms. For example, if you have a shopping habit when you are bored, try to replace that activity with another, such as exercising or reading.
Identify Financial Goals
The key to this one is that you must be specific, B-E specific! Instead of vaguely saying “I want to save more”, commit yourself to contribute 2% more toward your 401K. Do you finally want to purchase a home or pay off student debt? Whatever it is you want to work toward in 2020, write it down and then outline a plan of action to follow throughout the year.
Find Out Your Current Financial Health (AKA Credit Reports)
As you are making 2020 financial goals, be aware of where you stand currently and what’s realistic to you. Credit Scores tell a great deal about your financial health such as your ability to make on-time payments, your average credit card balance, and any derogatory marks against your credit. Derogatory marks on your credit may also have been made in error or could be a sign of fraud/identity theft.
In the state of Georgia, as a resident, you are entitled to receive two free credit reports from each credit reporting agency per year. To order these you may go to www.annualcreditreport.com or call 1-877-322-8228. Take advantage of these free tools as soon as possible!
Automate Good Habits
If you're reading this article and have made it to this point that means you are taking your financial resolutions seriously... at least at this moment. So, I encourage you to run with this fleeting eagerness for better financial habits by automating as many goals as you can right now. If you identified paying off student debt as a financial goal, link accounts, and set up automated payments. Wanting to buy a new car, but working on accruing a down payment? Open a savings account and set up auto withdrawals from your checking to your savings account every payday. The point is to make good money habits as easy and painless as possible!
Consider free or less expensive options
The new year is a popular time to get a gym membership, but there are many resources you can use to exercise at home and skip the $30+/month membership fee. Jog around your neighborhood or download an at-home fitness app that walks you through do-it-yourself workouts. Look for alternatives to spending money and try to have a “no spending day” once or twice a month. Cook meals for yourself; exercise; go to a park; read a book, these are all activities that can help you get through a day without spending any money.
Practice Preventative Maintenance for You and Your Home
Small issues can create big problems if left untreated or not caught in time. This is true for physical health and home appliances so make sure to stay on top of both in the new year. Make routine visits to your dentist and doctor. These visits are normally covered by workplace or government healthcare and can be the difference between a quick and easy fix or costly medical treatments with a large amount of out-of-pocket expenses. For homeowners, be sure to change air filters regularly, inspect your roof for signs of decay or damage, conduct an energy audit to save money on utilities, and generally stay vigilant on potential breaks or repairs that may need to be done.
Educate Yourself
Ignorance may be bliss, but it can also be expensive. In the world of finance what you don’t know, may be losing you money. Take some time out of each day or week to learn something about money management or investing. If you think you don’t have the time to sit back and read a personal finance book, check out personal finance podcasts available to you for free. These are great to listen to while commuting to work or exercising. If you don’t know where to start, browse this list from US News, https://money.usnews.com/money/personal-finance/saving-and-budgeting/articles/best-personal-finance-podcasts-to-listen-to. To see where your knowledge might be lacking take this free online quiz from Wallet Hub https://wallethub.com/wallet-literacy-score/.
Financial struggles are one of the leading causes of stress in America today. When you empower yourself with tools and knowledge to better manage your personal finances it will not only help your bank account but improve your mind and body. From all of us here at SunMark Community Bank, we wish you a healthy and prosperous New Year!