15 Best Financial Resolutions for 2020
New Year’s. A time of renewal. A time of promise. A time of hope for the future, indeed. And if you care about your financial health, it’s a great time to make financial resolutions for the coming year. We’ve compiled a list of the 15 best financial resolutions for 2020 to help you get your money on track.
Whether you’re looking to cut down on your debt, curb your spending or increase your income, you’ll surely find some helpful resolutions on this list. So get the champagne ready, bake some pigs-in-a-blanket and get ready to have your financial #bestyearever.
The Top 15 Financial Resolutions for New Year’s Eve
- Declare Your Specific Financial Goals
It’s pretty easy to say you’ll spend less or save more. The problem is, it’s a really difficult resolution to stick to because it’s so general. Making your financial goals for 2020 specific is a worthy financial resolution.
Analyzing your values, desires and long-term goals can help you create measurable and specific things to strive for. You may even want to use the popular SMART goal method to get really specific.
- Plan Your Budget – and Stick to It!
Sixty-seven percent of Americans keep a budget. That’s great! Unfortunately, it really only helps if you do a reasonably good job of sticking to it.
Create your budget based on the previous year and then adjust it to align with your current values, priorities and goals. Download a budgeting app to help you track and manage your budget, or even keep a budget in Excel.
- Check Your Credit Report
Your credit report is a good window into your financial health. It can help you detect any errors, such as false delinquencies that can lower your score. And it can even help you catch fraud.
Every year, you can request free transcripts from the three credit bureaus: Equifax, TransUnion and Experian. You can go to this website to request your free annual reports in one shot or stagger the three throughout the year.
- Pay off Some – or All – of Your Credit Cards
Credit card debt is often the worst type to have because the interest rates can be so high. So paying down – or paying off – your credit cards should be a major priority for you if you are carrying significant balances.
There are different strategies that you can use to do this, such as the snowball method (paying off the smallest balance first) or the avalanche method (paying off the highest interest rate first). To help improve your debt situation, may also want to consider either a balance transfer to a card with lower interest rates or a personal loan.
- Plan Some No-Spend Days – or Weeks
Reaching your goals is all about building good habits in the new year. One good habit you can build is to plan a few no-spend days throughout the month. You can make this one of your finance resolutions for the coming year.
On these days, you should expect no money to leave your bank account. No shopping, no payments, anything. This can help you to begin whittling away at your expenses because you’ll see that some of your expenses may even turn out to be unnecessary.
- Start or Pad Your Emergency Fund
Twenty-eight percent of U.S. adults have no emergency savings. This is bad. If this is you, or if you want to increase the amount of your fund, consider using automatic transfers from your checking account into a savings account each month.
This helps ensure you’ll have money for those unexpected situations like car troubles, house troubles or medical expenses. Research has shown that saving as little as $300 in a fund can help you in an emergency and can help prevent you from increasing your debt.
- Exercise on the Cheap
Many New Year’s resolutions center around weight loss or exercise and health. But what about your financial resolution relating to your health? There are expensive ways to exercise, such as joining a pricey luxury gym or getting yourself a Peloton bike despite that infamous bad commercial. You don’t even need to purchase top-of-the-line Nike sneakers. Work with what you have.
There are plenty of free or cheap options for you out there, such as online exercise videos. Or just take a walk or jog on the beach or at a park. There are also exercise apps like the Fitbit Coach that can help as well, but these apps will often upcharge you for more access so be careful here.
- Increase Funds in Your Retirement Accounts
A lot of people worry that they will never be able to afford to retire and move to a retirement home in a nice place like Georgia. Don’t be that person.
Instead, be the person who resolves to increase their retirement funding this year. You can do this by increasing your contribution to your 401(k) or opening an IRA account. And make sure you are taking advantage of any employer matching programs.
- Eliminate One Bad Money Habit
Eat too much? Drink too much? Want to spend too much? No, I’m not just misquoting my musical hero Dave Matthews. I’m pointing out things that may be leading you to bad money habits, such as excessive eating out, splurging at bars or online shopping.
Pledge to eliminate one of your bad money habits in 2020. Cook meals at home. Start an inexpensive hobby at home instead of going out. And if you are spending money because of emotions – sadness or boredom for example, try a healthier pastime like playing music or exercising.
- Increase Your Credit Score
Your credit score is like your financial report card and your resume. With good marks, it can unlock financial doors. With bad grades, it can make your life much harder financially. So a finance resolution to improve your score can be a key to a better financial future.
Things you can do to improve your score is to be sure you make all of your monthly payments on time. Cut down on your credit card balances. And limit the amount of new credit accounts you open that lead to hard inquiries.
- Pay Down Student Loans
There is a student debt crisis in America. As a result, many of us have more student loan debt than we would like at this point. You can make an extra effort with your finance resolution in 2020 to lower your student debt.
To do this, analyze the interest rates on your various loans. You can pay extra each month on the highest rate loans. Or look into consolidating your loans – this might help to lower your overall interest rates.
- Eat Out Less, Dine In More
Dining out is fun. You’ll often spot me at one of my favorite restaurants around Baltimore town like The Helmand or Restaurante Tio Pepe. The problem with this is that it costs me a lot of money.
One of my personal financial New Year’s resolutions for 2020 is to dine out less and cook more. Not only does this save you money in the short term, but by eating healthier you will save on healthcare costs in the long run. And you’ll probably live longer, too, which is a super swell side benefit.
- Cut the Cord
One of my favorite things I did financially in 2019 was to finally cut my cable cord. Why was I still paying for cable television service? I was being charged way too much for too many channels I didn’t want, plus I was locked into an annual contract.
Cancel your cable and get yourself a streaming service or two like Hulu or Disney+ instead. Just be careful not to oversubscribe to too many or the charges will quickly add up. Trust me, you will not regret this decision. I sure don’t.
- Boost Your Income
Saving money is hard. So is increasing your salary. But there are ways to do it other than telling your boss that he should give you a raise right now. There are plenty of sources of passive income out there. Pick yourself a nice side hustle or find some passive income that allows you to make money from home.
- Invest. And Invest More.
Investing is the key to wealth and financial freedom. If you truly want to achieve financial independence, you need to make 2020 the year you start investing – or you start investing more. Don’t know how or where to start? Luckily, Investment U is a treasure trove of information on how to invest in everything from penny stocks to the marijuana industry. So dive on in and get to reading.
Whichever finance resolutions you choose for 2020, make sure you go into the new year ready to take on your biggest financial goals and challenges. Nobody ever regretted improving their financial health. How will you start?
– Brian M. Reiser,
Investment U Contributing Writer
Feeling inspired yet? Great! If you want a daily dose of inspiration delivered right to your email inbox, make sure to sign up for our FREE daily e-letter below. And have a wonderful New Year!
About Brian M. Reiser
Brian M. Reiser has a Bachelor of Science degree in Management with a concentration in finance from the School of Management at Binghamton University.
He also holds a B.A. in philosophy from Columbia University and an M.A. in philosophy from the University of South Florida.
His primary interests at Investment U include personal finance, debt, tech stocks and more.