Vowing to save more money or get out of debt are admirable New Year’s resolutions, but, for many reasons, these goals can be challenging to meet. Your ability to add to your savings or pay off debt depends on your cash flow — after all, wanting to reach those goals isn’t the same as having the money to do it. On top of that, you can’t predict the future. Unexpected expenses can wreck your financial plan, making those resolutions hard to stick with.
Of course, this doesn’t mean you shouldn’t resolve to improve your finances, but try to think beyond what’s in your wallet. To that end, here are some resolutions you’ll actually keep.
1. Track Your Spending
If you mostly use digital payments, it should be pretty easy to see how you spend money. For those who don’t know where their money goes, start keeping tabs on transactions and you should start to see patterns emerge. For cash users, receipts can help tally spending categories or you can write transactions down in a notebook. Often when people start tracking their spending habits, they end up being more thoughtful about what they buy and cut out frivolous purchases.
2. Make a Budget
Knowing where your money goes is one thing; setting goals for how to use it is another. For those who haven’t budgeted or need to get back into the habit, it helps to start with broad categories so you don’t get overwhelmed trying to figure out what funds should go where. Budgeting is a matter of personal preference: Some prefer to use a spreadsheet, while others keep paper-and-ink records, and others budget by their pay periods. Try different systems until you find what sticks. The goal isn’t always to hit your budget, but to find a better way to manage your money.
3. Check Your Credit Scores
Even if you’re not thinking about applying for credit now, it’s a good idea to know where your credit scores stand. Regularly checking your credit scores — you can get two credit scores for free every 30 days on Credit.com — helps you see how your financial behaviors are affecting your credit and identify signs of fraud. There’s no excuse for not checking; just make sure to compare the same score every time because each one is a little different.
4. Get Your Free Annual Credit Reports
By law, consumers can get free copies of their credit reports every year from the major credit reporting agencies Equifax, Experian and TransUnion. You can request your credit reports through AnnualCreditReport.com or by phone or mail, and you’ll want to review the documents closely. Dispute any credit reporting errors you find and set a reminder to pull your reports a year from now.
More Money-Saving Reads:
Image: Creatas Images