The new year sparks motivation for positive changes. But when it comes to finances, lofty resolutions often get abandoned by February as reality sets in.
This time, set yourself up for success by choosing financial goals that align with your lifestyle and values. The key is framing resolutions around incremental improvements rather than major overhauls.
Let’s explore 7 realistic financial resolutions you can start now and actually maintain long-term. With commitment and consistency, these resolutions will pay dividends toward financial health all year round.
Resolution 1: Add 1% to Your Savings Rate
Saving more money is a common new year’s goal. But drastic increases often prove unrealistic and prompt you to revert to old spending habits.
Instead, try boosting your overall savings rate by just 1% of your income. For example, if you currently save 5% of your $50,000 salary, increase that to 6% or $300 more per year. This incremental progress adds up over time through compound growth.
The small monthly difference is unlikely to strain your budget. But even an extra 1% annually will make significant progress toward goals like an emergency fund, retirement, or big purchase savings account.
Resolution 2: Pay Down 1 Debt
Reducing debt frees up monthly cash flow and provides a mental boost. But tackling all debts at once frequently ends in failure.
To start your debt pay-down journey, identify just one debt to eliminate next year. Pick the loan or card with the smallest balance. This early win will motivate you to keep paying off debts in 2023.
Make a monthly budget and put any extra income toward your target debt while maintaining minimum payments on others. Only log into that debt account to avoid being overwhelmed monitoring everything.
By fully paying off even one debt, you gain momentum to keep attacking your liabilities one by one.
Resolution 3: Review Monthly Spending in Detail
Budgeting sounds tedious, but it doesn’t have to be. Many expenses can be trimmed just by becoming more aware of exactly where your money goes each month.
Commit to reviewing the past month’s spending transactions in detail once per quarter. Analyze your credit card and bank statements line-by-line. Look for overlooked subscriptions, consistent overspending in categories like food delivery, or impulse purchases that add up.
This spending review only requires an hour every three months. But it provides visibility to cut hundreds in non-essential costs. Gaining this financial self-awareness leads to better choices each month moving forward.
Resolution 4: Learn to DIY One Home or Auto Expense
Hiring help for minor home repairs, cleaning or vehicle maintenance gets expensive over time. Resolve to DIY at least one project or service next year.
Watch educational YouTube tutorials to gain confidence you can handle simple fixes yourself. Only take on what you’re comfortable attempting around electrical, plumbing or hazardous materials.
But activities like replacing air filters, patching drywall, touching up paint or changing your oil are safer DIY opportunities with guidance. You’ll gain satisfaction while saving money.
Resolution 5: Invest Money You Get Unexpectedly
Unexpected cash gifts like tax refunds, work bonuses or birthday money provide a chance to invest and grow your net worth. But it’s tempting to spend these surprise inflows instead of saving.
This year, set a rule that any unexpected cash influx gets invested, not spent. Even putting half toward stocks, mutual funds or paying down debt helps build financial growth momentum.
This prevents your lifestyle from inflating to match income spikes. Allot the funds before they hit your everyday spending account so you’re less tempted to splurge.
Resolution 6: Discuss a Difficult Money Topic with a Loved One
Discussing finances, even with close loved ones, can feel awkward or sensitive. But avoiding big money conversations out of discomfort often leads to escalating problems.
Have at least one talk in 2022 with your partner, elderly parent, adult child or other family member about an overdue financial topic. That could mean starting an estate plan, broaching retirement savings, or hashing out financial infidelity.
Knowing you have this money resolution on the calendar makes it easier to initiate an important dialogue. Addressing issues directly strengthens relationships and avoids growing resentment.
Resolution 7: Give Yourself a Break with One Fun Purchase
Amid all the budgeting and serious saving, don’t forget to enjoy life! Depriving yourself of any indulgences often backfires into overspending.
Pick one personal splurge item you’ll buy guilt-free in 2022, either with cash saved up or budgeted for. That could mean a luxurious purse, high-end whiskey, or necklace you’ve eyed for years.
Build anticipation knowing you have this special item to look forward to purchasing within your means. Pursuing goals doesn’t have to mean sacrificing everything you enjoy.
Start the Year Strong
Reframing resolutions around incremental progress sets you up to ingrain positive financial habits over the long run. Pat yourself on the back for any improvement rather than obsessing over perfection.
Checking even one resolution off this list puts you ahead of most people by taking one step toward greater financial literacy, stability and independence. Compounding small gains makes big differences over time.
Here’s to starting the new year focused, intentional and accountable. May the financial path you begin today lead to greater prosperity and confidence all year long!
