1. Dent your debt
Owing money on credit cards, mortgages, vehicles and student loans is a reality many Americans contend with. While trying to pay off all of your debt is a reasonable idea, it is also a difficult goal to reach. Simplify your goals by breaking them down: Look at your debt and decide on a percentage you’d like to shrink it by. Resolving to eliminate 5%, 7% or 10% of your debt gives you a more realistic way to approach the issue.
In addition, be savvy about the way you pay down debt. Not all debt is created equal, so deciding how to tackle it can help a lot. You likely want to pay down high-interest debt first and focus on other debt later. This article on the best way to pay off debt can help you determine the right approach to achieve your goals.
While you’re thinking about debt, also consider how to simplify your bill payments. More than a third of Americans admit to paying bills late.footnote3 The consequences of a late payment—especially to your credit score—are significant. You can take steps to make sure that doesn’t happen: Rather than vowing to never make a late payment again, resolve to put technology to work for you.
A Bank of America survey found just 35% of respondents use an app or mobile banking to pay bills. Make online banking work for you by automating bill payments (or paying them online) and setting up alertsfootnote4 so you’re aware when a bill is coming due. Many creditors will eliminate your paper bill and email your statements instead. Streamlining the bill payment process is a great way to help make sure your bills get paid on time, every time.
Learn more about how to simplify your bill payments.
2. Make savings simple
If you set a goal to save some big amount by the end of the year, there’s a chance you’ll fall short. Financial goals that are many months away can be harder to achieve and, if you have a month or two with unexpected expenses, you may have to pause your savings effort. That decision not to save might seem like a setback.
Instead, give yourself specific, smaller, short-term (or seasonal) goals. Maybe you want a new smart phone or you’d like to take a trip somewhere or you have your eye on a holiday gift. Set your sights on those and start saving toward them. Rewarding yourself is a fun incentive, and saving regularly is a great habit to adopt. You can make this even easier by scheduling regular transfers via online banking into your savings account.
3. Track your spending
If the idea of setting and maintaining a budget sounds a bit overwhelming, you’re not alone. A 2014 Experian study found just 39% of U.S. adults establish and maintain a budget.footnote5 Rather than starting with the idea of creating an entire budget, choose to track your spending instead.
Monitoring your spending—a task made easier with banking apps and mobile banking—is a valuable way to identify areas in which you can make cuts. Once you know where your money is going, it’s simpler to set up a budget, especially since you’ve already done a lot of the work.
4. Invest in yourself
By the time they reach their 60s, the average American has set aside $172,000 for retirement, according to a 2015 Transamerica survey.footnote6 Over the life of a 15- or 20-year retirement, even with Social Security and other forms of income, that works out to a relatively low standard of living. Instead of worrying about what the future might hold, make a resolution to invest in yourself right now.
Information is one of the best investments you can make. Find out about your retirement investment options. Resolve to either start contributing to a retirement fund or, if you’re already invested, try to up your contribution. This Merrill Edge piece is a great guide to building a retirement nest egg at any age.
Keeping your financial resolutions is always challenging, but they don’t have to be impossible. Set positive, realistic financial goals and remember, you’re doing this to make things better.