Last updated on February 1st, 2021 at 08:31 am
Now that 2021 has started and we can officially say goodbye to 2020, it is a great time to think about your New Year’s resolutions and what you want to get accomplished this year. 2020 was a rough year for everyone and having a financial plan could not come at a more crucial time. Many of the most common New Year resolutions are to lose weight, learn a new skill, or even simply get more organized with your life. A financial New Year’s resolution is no different. Below are 6 great financial New year’s resolutions that are small but impact your wallet.
Getting healthy and going on a diet is common for many at the beginning of the year. Before you rush off and pay for that gym membership or that subscription diet meal plan, think about how that financial obligation will impact you in the long term. Does the gym come with a year contract and membership dues for example? If so, does this gym make sense for me a year from now?
Perhaps instead of paying for a subscription or a contract, maybe look at ways to work out for free. Maybe find a trail to walk or take morning runs. Maybe find some ways to manage your diet by meal prepping and tracking what you eat on a free app on your phone. Try some yoga in your living room to end your day.
Freeze your Credit
There are many ways to protect your identity, but one of the easiest and free ways I found to do that is to freeze your credit. Equifax, Experian and TransUnion allow you to free your credit for free. When you want to access your credit for a credit card or a new loan, simply remove the freeze. When you are done, you can reapply the freeze. The advantage to doing this is if someone tries to run your credit without your permission, such as opening a credit card, it will fail.
Up your retirement contributions
There are many retirement blogs and articles that outline how to max out your retirement contribution limits. For example, if you are under 50 you can contribute up to $19,500 a year to your 401K. Unfortunately for many people saving $19,500 is difficult to do. I prefer an easier approach if you cannot contribute the max. Take whatever you are saving towards retirement and save 1% more than you did last year. This can be into any IRA or 401K. Saving only 1% more unfortunately often is not enough for retirement, but anything saved is more than nothing. With the power of compounding, 1% adds up quickly in the long term.
Cut the Cord
According to a recent report, cable bills are hitting a point they are more than utilities combined. The report states that households are paying $217.42 a month just on cable and only $205.50 on utilities. That means the average American is spending more on their tv entertainment than their gas, electric, water, trash and sewage.
You might think why not just cancel the cable and sign up for HBO Max, Netflix, Hulu, and Sling. There are many services out there, such as streaming services that seem enticing. They might only cost a few dollars, but when you add each one up, they can quickly add up and you might be back to where you were spending on cable.
Negotiate your Bills
Sometimes simply calling your provider can actually lower your bill. Maybe you are paying for something you do not actually need, which can lower your payment.
Worst case, maybe it is time to make a switch services. Get quotes for maybe new car insurance or phone carrier for instance. You never know what you find unless you look.
Spend less on food
Spending less on food does not mean eating less. Especially with COVID, many folks have not been eating out as much. Companies like DoorDash and Postmates have made it way too easy to order food and have it delivered to your door. Before you start just buying fewer groceries, there is an easier way to spend less such as making a shopping list, shopping in bulk or ordering curbside pickup.
There are thousands of financial New Year’s resolutions you can make such as setting budgets, pay off debt and make more money.No matter what you pick the best strategy is to start small and stick with it. You will be on your way to accomplishing that New Year’s goal in no time.