As the new year begins it’s great time to set some new year’s resolutions. While resolutions involving your physical health are important, setting resolutions for your finances is as well.
The new year is a great time to examine your budget and make adjustments that will help you gain control of your finances. Doing so will allow you to save for the future and be better prepared for unexpected expenses.
Five Financial New Year’s Resolutions for 2020
Financial resolutions should be realistic goals that can be achieved in the new year. Consider setting the following resolutions in 2020.
- Set or update your budget. Set aside some time early in the year to examine your budget and decide what needs to be altered for the new year. Take a hard look at all debts and expenses, as well as amounts you want to spend for food, entertainment and savings.
- Eliminate at least one debt. After reviewing or creating your budget, decide on at least one debt that you will pay off in the new year, and make a plan to achieve it. If you do not have a debt that you can realistically pay off by the end of the year, reduce at least one debt by paying more than the minimum monthly amount, so you can pay it off more quickly.
- Make one financial sacrifice. Review your budget again and decide what you can do without. Choose at least one expense that you can either reduce or eliminate completely in 2020. This will give you more money to use toward savings or paying down debt.
- Start saving automatically. After you’ve decided what you will be able to afford to save in 2019, make it automatic. If your paycheck is deposited directly into your bank account, talk to your employer’s human resources department about having a set amount deposited directly into a savings or retirement account, or talk with us at Farmers Bank about setting up an auto transfer between your payroll account and your savings.
- Check your credit report. Visit annualcreditreport.com to order a free credit report from each of the credit reporting agencies. Review your reports to ensure that there are no mistakes in your credit history and to protect yourself from identity theft.
If any of these goals seem too daunting, consider incentivizing yourself by choosing a way to reward yourself for meeting these goals at the end of the year. Whether your reward is a gadget, experience, trip or something else, earmark a specific amount of your savings that you will use for your reward and keep that reward in your sights as you work to take control of your finances in 2020.