Okay, so maybe your New Year’s resolution track record isn’t so good. Those fifteen pounds you planned to lose? Miraculously, still there, plus they found a friend (or ten)! All that extra time you wanted to spend with the family? Perhaps better spent away from the Monopoly board. Make a note for 2021.
So, when it comes to starting the year right with your finances, it makes sense that you’re a bit wary of your many attempts at change. But what if you had a few tips to help you?
Here’s how you can conquer that fiscal resolution to make a change that’ll last.
#1 Open a High-Yield Savings Account
Here’s the thing: lots of people struggle with keeping money in their savings account because, well, what makes it any different from a checking account? With most savings accounts going for APYs of merely 0.06%, it’s easy to lack the motivation to keep money there.
But what if you saw your money growing from the sheer act of not touching it? Enter: high-yield savings accounts.
These bad boys bump up your APY to 1% (or even higher), making it much more satisfying to put money into savings each month and keep it there. While these types of accounts are typically only offered by certain online banking platforms, they’re still a worthy addition to anyone’s financial portfolio.
#2 Design a Budget (and Actually Stick to it)
Come on, don’t act so surprised! You knew this one was coming. Just like a real weight-loss plan can’t go without diet and exercise, a proper fiscal habit-change can’t go without a budget.
However, once you find the right budget for you, you’ll realize that it’s not so hard to stick to. Of course, if you tell yourself you’ll only spend $30 a month on Postmates, then, well, you tell me if you think it’ll work.
The key to designing a realistic budget is to use past bank statements to give you a proper idea of how much you spend in certain areas. On top of that, don’t forget to allocate money each month to fun things like:
- Going to the drive-in with a date
- Buying that nice laptop at the end of the year
- Upgrading to new furniture to create a home you love to spend time in
- Splurging on some beautiful plants for the at-home office
- Renting an Airbnb apartment in San Diego for a week
#3 Get Yourself a Financial Advisor
Start the year with a bang by scheduling an appointment with a financial advisor to help you get your ducks in a row as the new year kicks off. For anyone without the intuition (or patience; or ability to spreadsheet) for finance, a wealth management service could be just what you need to approach your new fiscal future with a positive attitude and full-on confidence.
#4 Make Debt Repayment a New Year’s Resolution
Unlike your motivation to go to the gym, debt doesn’t just disappear after one week. You have to keep chipping away at it, each and every month. That means taking strategic steps towards eliminating your largest balances and making sure you never miss a minimum payment again. No cheat days when it comes to debt repayment.
The two main approaches to this process are:
- The avalanche method – Start with your largest balances first and make sure you’re paying the minimums on all balances. Then, take the rest of your debt repayment budget and apply it to the largest source of your debt.
- The snowball method – Tackle your balances with the highest interest rates first until each balance is repaid. This is a more cost-effective method but perhaps less motivating because you don’t see as much improvement as quickly.
Step into the New Year with a New Attitude
Don’t walk into the new year with a self-defeating attitude. With the help of professionals, some chanting affirmations, and a solid plan, you have everything you need to conquer this resolution once and for all (and keep it that way for years to come). Happy budgeting!