Dec 21, 2017

Best Financial New Year's Resolutions for 2018

new year's resolutions

New Year. New You. If you've been thinking about turning over a new leaf when it comes to your finances, here are some tips to set yourself up for a year of better financial habits. 

Modify your direct deposit 

A simple change to your direct deposit can help you save money by automatically setting aside a certain percentage of your paycheck. Set up your deposit so that 90% of your earnings are distributed to your checking account and the remaining 10% sent to a savings account. Leave this account alone for a year (out of sight, out of mind) and watch your savings grow without feeling too much of a financial burden. 

Be realistic  

Goals are important when it comes to your financial well-being! By setting yourself up for success you're more likely to maintain your monetary resolutions for 2018. Start with recognizing the spending habits you'd like to improve and take small steps towards reaching those goals. Your long-term goal might be a new car but starting out with a plan to save a small amount each day might be more obtainable. Check out these realistic savings plans for some inspiration on where to cut back to get you to that ultimate goal! 

Track your goals 

There's nothing more motivating than literally seeing your goals come to fruition. Whether 2018 is your year to save, pay down your debt or make a big purchase, having a visual representation of your progress will make you more likely to stick with your resolution. Check out these apps to help you digitally track your progress! 

Build a budget 

Sometimes the hardest part of getting on the right path to a more financially responsible lifestyle are the very first steps. Building a budget can feel overwhelming if you aren't sure where to start, or maybe you're nervous about the realities that will come to light. 

A good rule of thumb when starting a budget is to abide by the 50/30/20 rule; which means spending 50% of your income on necessities (rent, insurance, utility bills, transportation, etc.), 30% on wants (lattes, new clothes, meals in restaurants, etc.), and 20% towards your savings goal (this should be in addition to any contributions you're making towards a retirement fund through your employer). Tally up your spending compared to your cash flow and to see where you could make changes to get your closer to the 50/30/20 rule. 

Consolidate your debt 

Consolidating debt is a great way to get a handle on exactly how much you owe and lock in a better interest rate. Whether you have credit card bills, medical expenses or other high interest debt that will be difficult to pay off, consolidation is a great way to see the light at the end of the tunnel. Consolidating your debt can be easy and often times you can get approval online or over the phone. 

Until January 31, 2018 Hughes Federal Credit Union is offering a Holiday Loan at 9.5% interest rate for up to $5,000 for qualified applicants. This would be a great jump-start at chipping away at your oldest or high interest earning debts, plus it'll leave you with less payments to worry about each month. 

Dry January (for your wallet)

The concept of Dry January is to off-set the extreme indulges that are often involved during the holidays. For some people, this means consuming no alcohol during the first 31 days of the years. A jump-start like this can put you on the right path towards reaching your health goals during the new year. Putting yourself on a spending freeze in January will put you in the right mindset for the remaining 11 months of the year when it comes to your finances. This January only let yourself purchase absolute necessities (food, transportation, medication, etc.) then when February comes along you will have a better grip on items you can do without.