As the calendar changes, you’ll hear a lot of people talking about their resolutions. I’m a firm believer we don’t need to wait for the New Year to make changes, but let’s be honest, it’s hard not to be reflective when everyone is trying to improve themselves. Now that the holidays have passed, you’ll also hear people talking about their finances. If your New Year’s resolution involves money, there are plenty of ways you can change.
While the calendar doesn’t dictate when you can adjust your goals, it does dictate other things. Specifically, your finances are highly dependent upon the calendar year. This means a new year gives you a blank slate and a great opportunity to get organized.
I admit that I’ve taken a firmer interest in my finances since the start of the pandemic. Some of my goals in the upcoming year are slightly more advanced. There are other areas where I need to go back to the basics to get back on track. After the shopping spree known as the holidays, a new year allows new beginnings and an opportunity to implement new goals.
Pay My Bills… And Myself
I admit I’m pretty good at paying my bills on time. I aspire to live debt-free and build a high credit score. Not to give myself too much credit, but achieving this goal is an amazing step toward financial security, but there’s no need to stop there. In the New Year, I am planning for my future self.
This means getting a better understanding of savings accounts and stock options. Beyond having control of my bills, I want to have a saving goal each month. This money is going to sit, wait, and collect interest. Today might be a bit more boring, but my future self will be thankful.
Get a Handle on My Subscriptions
I think we’ve hit the point where my subscription bill has become more expensive than cable. With Netflix, Hulu, Paramount+, Disney+, and Apple Music, there’s a lot automatically hitting my account. Add to the fact that Amazon incentivizes you to set up monthly shipments, and you may be losing more money than you realize.
It doesn’t take a lot of effort to monitor these subscriptions, but it takes zero effort for systems to automatically charge you. In fact, you don’t need every service every month. If you cancel one of them, its shows will be there when you return. Having a subscription to every service isn’t a badge of honor, it means you’re paying for more than you can consume.
Get Better Control of Your Income
2021 was a complicated year for me. Not inherently bad, but there were a lot of changes. I built some streams of “passive” income, changed jobs, collected unemployment in between jobs, received multiple stimulus checks, and added stocks with dividends to my portfolio. All of these things make me financially stronger, but they also have me nervous about tax season.
I know things are going to get a bit complicated when I file my 2021 taxes this spring, but I don’t need to accept this in future years. As I make financial decisions in 2022, I’m going to think about the inevitable tax implications. This will likely mean I will have taxes held whenever possible and keep track of receipts as I make purchases. I doubt I’ll ever enjoy tax season, but I have a feeling I can make it less painful.
Discover Where I’m Overspending
If you want to save money, or simply avoid throwing money away, it helps to reassess your spending. Sometimes your financial mistakes are obvious, like a gym membership that never gets used. There are other times when you need to be honest with yourself because you’re letting money melt away.
For example, I strive to be healthy. This means spending money on fruits and vegetables, but I’ve thrown a lot away. The average American family of four tosses $1,600 worth of food in a year, and I know I’ve made a contribution to this statistic. At some point, I need to admit to myself that I’m not eating a bag of spinach each day. It may only cost a few extra dollars to buy more, but throwing out food weekly means hundreds of dollars down the drain by the end of the year.
Craft Your Own Savings Plan
When it comes to saving, there’s a lot of advice. While there are some things that have universal benefits, like maintaining an emergency fund, most advice is not one-size fits all. The more you read financial information, the more you’re going to identify concepts that might be counterintuitive.
If you’re consuming financial content, it’s normal to hear some pointers that don’t fit your personal situation. If you try to apply every piece of advice you read, you’re going to drive yourself crazy. It’s better to craft your own plan. If you reject some advice you read, you’re probably doing things right.
Make Changes Without Looking for An Excuse
The New Year is a great opportunity to implement new goals, but it’s not the only time. People usually wait until the holiday because it’s easier to indulge in bad habits, but the sooner you address financial concerns, the less you’re going to lose.
Feel free to make changes after you file your taxes, as soon as you make a mistake, or whenever you feel empowered. There’s no wrong time, and there’s no need to wait. So, if you fall off the bandwagon this year, you can hop back on at any point.
Make the Year a Good Year
Regardless of your financial outcome this year, don’t be too hard on yourself. We’re all trying to make good decisions, but there are times when you need to enjoy your spending. There might be a month or two when you miss your goals, and that’s OK.
Ultimately, money comes and goes. This means your mistakes can be corrected and nothing is too permanent. Even if you end the year in a worse position than you began, your financial wellbeing is not defined by a calendar.
I often encourage people to be proactive with their spending, but the real goal is to be comfortable. By making good financial moves, you’re reducing stress and allowing yourself to worry less. This will keep your year positive and set you up for success in future years.
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