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December 5, 2023
The beginning of the New Year is an interesting time. It’s the time of year when people reflect on the past year of achievements while planning goals for the next. The tradition of making New Year’s resolutions has been around since people began celebrating the flipping of the calendar, and just as old are jokes about how difficult it is to actually follow through with your New Year’s resolution.
When it comes to achieving a long-term goal like a New Year’s resolution, I find it helpful to commit to smaller milestones that incrementally lead toward the larger ambition. These small successes throughout the year help maintain my focus and remind me how good it will feel when I finally reach the finish line.
Some of the most common New Year’s resolutions are to save more money or improve one’s financial situation, but the vagueness of these goals often leads people to fall back into old habits before they achieve their wish. If your resolution for 2024 is to improve your personal finances, here are some smaller objectives you can aim for that will help you stay on target.
Set a Savings Goal
It can be hard to commit to a resolution without a tangible reward at the end. Having a clear goal in mind helps motivate you to stick to your plan throughout the year and provides a sense of achievement when you finally reach the finish line.
Your goal could be something small like saving up to purchase a new video game console, setting aside money for a vacation later in the year, or something as large as buying a new automobile or putting a down payment on your first home. Your target should have a specific dollar amount and time frame for reaching your savings goal.
Establish a Budget
You can’t improve your financial situation if you don’t comprehend your situation in the first place. A budget compares your monthly income against your expenses while separating them into categories, creating a visual representation of your finances.
Now think about your savings target and how much you need to set aside each month in order to reach your goal within your time frame. Consider reducing your expenses in categories where you can comfortably cut back on spending. Make sure to check your spending regularly so you know when you’re getting close to the limits you’ve set for your budget in each category!
Throughout the year, experiment with different budget plans to see what works best for you. Don’t be afraid to shift your priorities if you start feeling the pinch in certain areas. Your main priority with establishing and maintaining a budget is being more aware of your spending habits.
Tackle Your Debt
This has been discussed many, manytimes on this blog, but it bears repeating: paying down your debt should be a top priority. By focusing on tackling your debts, you reduce the amount you pay in interest over the long term and put the money you’d otherwise put toward debt payments into a savings account.
Make a debt payment plan—and commit to it! Organize your debts from highest to lowest interest rate, then put extra monthly income into paying down the balances with the highest rate, while also paying your monthly minimum payments for all your accounts. As the year progresses and you pay down your debts, you’ll find you have more money to spend in other categories.
Become a Foodie!
This is not for everyone, but for those of you with time in your day to spare, growing and preparing our own food is an excellent way to save money. Think about the foods you love; are there meals you regularly purchase pre-made or dishes you typically order when eating out? Most recipes can be found online and purchasing the ingredients to prepare yourself will always be cheaper than ordering from a restaurant or buying a pre-made meal kit.
If you have the space to do so, consider planting a garden to grow your own fruits and vegetables. Not only does this save on the cost of buying produce, but it also provides an easy opportunity for exercise and promotes eating healthier—for those of you who also made a New Year’s resolution to lose weight!
Think Forward
Breaking free of an “in-the-now” mentality is difficult but crucial if you wish to achieve a specific financial goal. When you look at your monthly budget, after accounting for bills, debts, food, and other necessities, it’s tempting to look at the money left over as free for you to spend. This is why the first suggestion I made in this blog was to set a savings goal—it’s important to get into the habit of setting money aside for future expenses.
You should expand this thinking beyond a goal for 2024. Plan to put portion of your monthly income aside for retirement savings and/or an emergency fund. You should always have a plan for how to continue paying your bills, debts, and other necessities after retirement, or in the event of an unforeseen circumstance such as the loss of employment or a disaster. You can make this process easier by budgeting a portion of your monthly income to automatically transfer into a dedicated savings account.
Looking for more ideas on how to improve your financial wellness in 2024? Consider reaching out to a friendly Community Banker at New Tripoli Bank and asking about our savings products. There’s no shame in asking for help when it comes to improving your finances and our employees have experience with customers going through similar situations.
Sundra Sherwin is Vice President of Branch Administration for New Tripoli Bank. She has over 25 years of banking experience and has been with New Tripoli Bank for 15 years, working in various positions at the Bank. She has been promoting financial literacy in our community through her work with the Bank for years.