Financial Resolutions for the New Year
Making a resolution for 2016 to improve spending habits or increase savings can have a great impact over the next year and beyond.
A new year is the perfect time for a fresh start and new beginnings. You may be one of many people who take the time when the calendar changes over to make various resolutions to improve your personal life, such as exercising more. Or maybe you look out for others, promising to be a cleaner person at home or in the office. All of these resolutions can have tremendous benefits - if you are actually able to stick to them over the next 12 months.
The same approach can be taken to personal finance. Making a resolution for 2016 to improve spending habits or increase savings can have a great impact over the next year and beyond. Take some time to review possible resolutions and find one that accomplishes the goal you'd like to reach.
The following are some meaningful financial resolutions you can make for the new year:
Keep a closer eye on expenses
A common strategy that many Americans take to save money is cutting down on their regular expenses. By spending less at places like the grocery store, gas station and restaurants, you can keep more of your paycheck safe in your bank account. Taking this step isn't easy though, and requires both restraint and creativity.
Develop a plan for removing some costs from your monthly purchases. Instead of going out for dinner every weekend, dine in and invite your friends over for a potluck. If possible, walk, take public transportation or carpool to work instead of driving yourself. As WalletHub explained, making a strategic budget involves looking at previous monthly bills and figuring out where expenses can be reduced. You'll notice pretty quickly the money you have saved just by making a few small adjustments.
Make constant progress on lowering debt
From car payments to student loans, debt can be a huge burden that weighs on you every month. Nobody wants to fall further into financial trouble by not paying back what they owe. At the same time, it is difficult enough for many people to just make the minimum payments, so asking them to pay a considerable amount is tricky.
Ranking your financial priorities is a good way to chip away at the debt you owe , according to Forbes. Determine what is most important to you - some people are keen on saving in order to buy a home down the road, while others may find it necessary to spend on new clothes or fine dining. Whatever you rank as most important, getting rid of debt will help you spend on what you need.
Create an emergency fund
Even if you start January with a solid job and great housing, it doesn't mean you'll end 2016 in that same situation. Unfortunately setbacks do occur, such as being laid off at work or a break-in to your property. That's why it's vital to have an emergency fund that you can dip into when needed. Most financial experts recommend having the necessary money to live off of for three months tucked away, just in case it is needed.
The Financial Industry Regulatory Authority stated in its 2013 Financial Capability Survey that 56 percent of Americans do not have a "rainy day fund" they can access if an emergency strikes.
Devoting just a few dollars each week into an account can help build up this fund, which will be a great help if the time ever unfortunately comes you need to use that money.
Once you find a financial resolution that works for you, talk with a professional at Vectra Bank, who can help you work toward your goal.