New Year’s is just on the horizon. You can practically hear the pop of champagne corks and the cacophony of noisemakers already. Before the big celebration arrives, you should come up with the resolutions you’ll attempt in the year ahead.
If you’re hoping to get your finances in good order next year, these are some financial resolutions you can take on.
1. Start a Personal Budget
At the beginning of the year, you should get in the habit of following a personal budget. A personal budget is a useful financial tool that can organize your monthly expenses and prevent you from spending beyond your means. You can use it to avoid making major financial missteps, like overdrawing your checking account or bouncing checks.
How can you get started on this resolution? That’s simple. Download one of the top budgeting apps onto your smartphone or computer. Then, follow the instructions to build your budget from scratch. Test it out for the month to see how well you can stick to it. You’ll need to tweak it and make changes as you go along to make sure that it’s the perfect fit for your financial life.
2. Start an Emergency Fund
You don’t have any savings stashed away for emergencies. If something went wrong, and you needed to cover an emergency expense right away, you would panic.
This is why you should make a resolution to start an emergency fund. An emergency fund is a collection of savings specifically reserved for emergency expenses, like urgent car repairs, home repairs, and appliance replacements. When disaster strikes, you can withdraw from this collection of savings and make the essential payment without breaking a sweat.
When you start building your emergency fund, you’re still going to be vulnerable to emergency expenses for a little while. After all, it will take months to create a significant pool of savings. So, if disaster does strike, find out how to take action when you don’t have enough savings around. A borrowing option like a personal online loan could help you tackle the problem in a short amount of time. As long as you meet the eligibility requirements for the online loan, you can fill out an application for it. You just might get approved!
3. Pay Down Your Credit Card
Your credit card’s balance is very high. All of the shopping you did for the winter holidays is probably to blame for its unusually high amount.
You’ll want to make credit card repayment a resolution for the next year. If you don’t get serious about your credit card repayments, the balance could easily get out of hand. You might struggle to keep up with compounding interest, and over time, the balance could creep closer and closer to the pre-set limit. Then, you could max out your card.
So, make an effort to pay down your credit card balance. You’ll want to pay more than the minimum every single bill cycle. The more you can afford to put toward your bill, the better.
4. Save for Retirement
Do you have nothing saved up for your retirement years? This is a mistake, even when your retirement years are decades away. You’ll want to give yourself as much time as possible to put together a nest egg for the time in your life when you won’t want to work anymore. And the best way to do that is to start making your retirement fund right now.
How? Open up an individual retirement account (IRA). An IRA is a retirement savings account that comes with investment opportunities that will help your balance grow over the years. Look over your personal budget to determine how much you can afford to contribute to an IRA every month. Then, make sure to transfer that amount on a regular basis. Little by little, your nest egg for retirement will grow.
Take on these financial resolutions for the upcoming year. By the time that the next New Year’s rolls around, your finances will be in much, much better shape.