It’s that time of the year again when we start thinking about New Year’s resolutions. Do you follow a budget? Do you need to follow one?
We start thinking about the year ahead and what we achieved over the past year. We also start thinking about what we want to achieve.
We plan what changes we can make, and we make plans. Maybe we want to save more money, get better at managing our finances, spend less, payoff our debt- the list goes on.
The truth is that a lot of people give up on their New Year’s resolutions by February.
The problem is that sometimes we set ourselves too many goals at once, or we make resolutions that are too difficult to stick to.
Keep things simple this year!
What is a Financial Resolution
A financial resolution is any goal you are planning to accomplish within the next year that has some sort of money component to it.
Financial resolutions can be:
- saving more money,
- spending less,
- paying off your debt,
- saving for a house deposit,
- saving for a holiday
- starting a fund for your children’s education
- opening a savings account
Big or small, everyone’s resolution matters, and it’s important.
How to Plan Your New Year’s Financial Resolution
Before you choose your next year’s resolution, take some time to think and check your current money situation.
Where are you with your debts? Do you have savings? How much did you manage to save this year?
If you have been budgeting for the past year and you know where your financial situation stands, you should then take some time to think about what you would like to achieve next year.
The key to a good money resolution is to make a plan and stick to it. Don’t make plans that you won’t follow, and don’t expect yourself to change something that will be impossible.
The goal needs to be set clearly and be achievable. For example, if you want to save a certain amount of money next year, break down the amount into 12 payments and stick to that.
If you want to pay off your debt, work out how much you will need to pay off each month and stick to paying off that amount every month.
List of New Year’s Money Resolutions
1. Save money every month– you could set an amount that you would like to save every month and stick to that for the next 12 months.
2. Create a realistic monthly budget– if you have not done one yet, or if you are not following one, this is your chance to make one and keep on top of it.
3. Build an emergency fund– everyone needs an emergency fund, one that you can take money out of when you need it. One for those days when the car breaks down or the boiler needs repairing.
4. Pay off your debt– nothing beats the feeling you will get when the credit card is at zero- work out how much it will cost you per month over the next one year to pay off your debt and do it. Pay it off and forget that the card exists.
5. Stop unnecessary spending– before you buy something ask yourself if you really need it, or if you simply want it. Small purchases can add up quickly, especially when you buy regularly. Before you buy something ask yourself a few simple questions.
Do I really need this? Will I still want it tomorrow? Do I have something similar already?
These will help you to stop buying and overspending on unnecessary things.
6. Cut down on takeaways and eating out- there is nothing better than your own cooked food. Simply make a menu for the week and stick to it. Avoid eating out and ordering takeaways, maybe cut it down to once a month, because it is expensive and takes a lot from your budget.
7. Save for a house deposit- if you are still living in rent, maybe this year is the year you can start saving for a house deposit. Saving even a small amount is a great beginning for a new chapter.
8. Save for a holiday- if a holiday is not something you can afford every year, then challenge yourself and save for one this year.
9. Start saving for your children’s future- when talking about children’s future, everyone imagines- college, university, expensive, expensive…. Saving even £1000 to help towards their driving licence can be a massive help for their future.
10. Track your spending- create a budget plan and track every expense, every shopping trip and every payment bill payment. Write down everything, because once it is written down, it makes more sense and it is easier to see where the leaks are.
11. Reduce your monthly bills- reduce your monthly expenses, whether it is by cancelling a subscription, or changing your internet provider, try to reduce at least one of your monthly bills.
12. Start a savings account- start a savings account, and add a set amount to it every month.
13. Automate your savings- when you need to pay off debt or save money, the easiest way to do it is by automating the payments. Set standing orders for each payment to go out on your payday; that way, you will only budget the month with the money you have left.
14. Shop around for better deals- when you want to save money, you have to look for other options. When changing your internet provider, TV package or gas and electricity, be on the lookout for better deals and take the opportunity to save.
15. Spend less on clothes shopping- I love shopping for clothes!! Staying within budget is important, otherwise it can become an expensive habit. One of the best ways to stay within budget is to shop for the season. Allocate an amount you can afford to spend for the next season and take the money in cash. When the money is gone, shopping is finished.
16. Start meal planning to save money- meal plan for the week ahead, and shop for the ingredients you will need only for that week. This way you don’t overspend on food and you are not thinking daily about what to cook. It becomes easier with time, because you can just rotate the weeks.
17. Earn some extra money- sometimes the key to a good saving habit is not to always cut from your budget; sometimes we have to earn extra. Getting a side job will help you earn extra money, and if you are already on a budget with your current job, the extra money will be for your savings.
18. Have more no-spend days- a no-spend day, or even a weekend- it’s the best way to save money.
19. Start planning for events earlier- if there is a day of the year that takes a significant amount of your budget, e.g., the December holidays, start planning from the beginning of the year. You could start saving money right away from January and stay ahead.
20. Learn more about managing your money- managing money is not easy, managing your own financial habits is even more difficult. We don’t always stick to the budget, and we don’t always follow our own rules.
Learning how to manage your own finances will become easier, and you will learn from your own mistakes. Be consistent and stick to the plan you have created.
Final Thoughts
New Year’s resolutions, don’t have to be complicated. Small changes can make big difference over time.
You don’t need to do all 20 resolutions from this list. Start with one or two that you know you can really stick to, and once they become a habit you can add more resolutions.
With time, you will manage to add so much that you will be able to see the change in your financial situation.
The most important thing to make the New Year’s resolution successful is to stay consistent and stick to it.