Top Three Financial New Year’s Resolutions

It’s almost a wrap for 2019. I’m sure I’m not alone in thinking that the years pass by more and more quickly but this one has gone particularly fast for me with the excitement of relocating to Vietnam and starting a new life. As this momentous year comes to a close, my thoughts are turning to my hopes and aspirations for 2020 and I imagine yours are too. Yes, I’m talking about New Year’s resolutions!

Money matters often feature as New Year’s resolutions and finance is a positive place to focus your attention. The good thing about financial resolutions is that it’s relatively easy to set targets to monitor your progress, which will keep you motivated. That’s really important given that most resolutions are easily and quickly broken. In January 2019, fitness app, Strava, analysed the mass of data they collect and concluded that 18^th January was the date when the highest number of people cracked, dubbing it Quitters’ Day. That’s an improvement on 2018 when it was 12^th January! I wonder what date they will come up with for 2020.

To help you keep your resolutions beyond Quitter’s Day and establish long-lasting habits, here are some useful tips for sticking to the three most popular financial New Year’s resolutions:

1. Save more

It is pleasing to hear that this was the top financial resolution in 2019 at 48% although I wonder how many have stuck it out until now. Here’s how to stick to your saving guns.

Tips for saving:

- Be specific – setting precise savings goals and writing them down will provide strong motivation to turn your vision into reality
- Be realistic – you only have finite funds every month so budgeting is key. Work out how much you can afford to save each month and prioritise it over any other non-essential spending
- Make it automatic – set up your finances so that the amount you have decided to save is transferred out of your current account, and temptation’s way, as soon as you get paid.

2. Pay off debts

This was the top financial priority for 29% of people in 2019. Smart people! Paying high rates of interest on credit and store card debt is wasted money so getting rid of these unsecured debts should be a priority for anyone who wants to get their finances in order.

Tips for paying off debt:

- List all your debts and the interest you are paying on each of them
- Look into whether it is possible and beneficial to consolidate loans or transfer balances to make the most of no or low interest offers for new clients
- Check out an online debt repayment calculator to find out how much money and time you can save by increasing your monthly payments – it will provide you with some tangible figures to motivate you
- Work out how much you can afford to pay off each month – this will almost certainly involve looking at where you can cut down spending and keeping a tight budget
- Consider selling any belongings that are surplus to requirements to boost your debt repayments
- Write down your debt repayment plan as this will help you stick to it
- Start with the debt with the highest rate of interest and go for it
- Reward yourself when you reach certain targets

In my experience getting rid of debt is a huge boost to wellbeing and in many cases acts as a springboard for people to start taking their financial planning seriously and adopting habits that will create a much healthier financial future.

3. Spend less

Top financial priority for 15% of people, spending less fits in well with the current zeitgeist of consuming less and keeping things simple to save the planet and will help you achieve either of the above two resolutions to boot. You might be surprised at just how much less you can spend when you put your mind to it.

Tips for spending less:

- Use cash – there is some evidence to suggest that using cash makes people consider purchases more carefully and that makes perfect sense to me
- Track spending – you’ll probably be shocked at how much money you manage to fritter away on nothing and you’ll certainly be able to pinpoint areas where you can cut back
- Keep credit cards for emergency use only. I’ve heard of people freezing them in ice to make it hard to use them but leaving them at home is a less extreme policy!
- Put the money you don’t spend to good use – pay off those debts, save and start investing for your financial future

All three of these resolutions will result in you managing your money better and taking control of your finances. The next step is to begin investing and growing your money at a faster rate.

I wish you all the best with sticking to your financial resolutions. Let 2020 be the year you start managing money like a pro.