New Year’s resolutions have become a normal part of life for many people, almost like an annual ritual. We make plans to transform ourselves beginning January 1, full of energy and excitement over what we can be. The sky is the limit!
Really, I do like the notion of getting excited about making positive moves, and like the energized feeling that seems to be in the air as the calendar hits January 1. Personally, I do make resolutions. Hope is such a great thing, and it can really keep people moving forward. Heck, for some people out there, it can simply keep them going.
That being said, there is something a little bit interesting about waiting until one particular day to make changes, and start (or re-start, in many cases) our quest to achieve goals. It’s almost like many of us just live it up doing whatever we want to do until the the December 31 New Year’s eve countdown ends, and we’re into the new year and things radically change immediately. I’ve seen this maybe 6 or 7 years ago, when the health club I belonged to got packed all of a sudden in the beginning of January. There was even a guy jogging – or struggling to jog - on an indoor track while he was wearing a shirt and tie. Clearly, he wasn’t used to health clubs or working out in general, and had just jumped right in to what was obviously a resolution of his. I do give him credit though, for taking positive steps.
Anyway, I suggest that we get a head start on our new year’s resolutions, and get things started now. Why not?
Of course our resolutions can be across all aspects of our lives. Here, I’ll list 10 new year’s money resolutions for people to consider:
1) Increase the percentage of your income that you save in your 401(k). If you’re maxing out, great! If not, how about setting a goal to increase this percentage by a realistic amount. If you’re investing 5% of your pre-tax income in a 401(k), try to push that to 10%.
2) Find 3 discretionary expenses to cut. Sure, we could go crazy over things to eliminate from our regular spending routine. Frankly, that might actually be a good thing for a lot of folks. For many of us though, we’re making reasonably good decisions in general – but probably have a few areas we could work on if we really looked at it enough. For me, it would be: cutting out one outside meal a week, cutting out any beverage purchases (soda, coffee) 3 days of the work week while subsituting water, and paring back on our cable plan. Nothing extreme, just a few cuts.
3) Fund a 529 account, if you’re a parent. Being a parent, and having opened a 529 account, I can see the value. Now, we can only do what we can do, and don’t want to forego our retirement to put in additional funds. However, as much as we can help with regard to college education, it will benefit our kids. If you already have a 529, perhaps try to bump up the savings - even if just a bit.
4) Focus on what’s important. Thinking about the 80/20 rule here. Yes, the Pareto Principle and money can be related. I’ve heard how 20% of customers might yield 80% of results. Well, If we focus on what’s truly most important, we are optimizing ROI of our time. Resolving to prioritize to-do lists weekly – or even daily – can help us stay focused and use our valuable time smartly.
5) Refinance your mortgage. If you don’t have a mortgage, this might mean diligently shopping for the best loan if you are going to be buying. If you do have a mortgage, there is no reason I can think of for most people to be carrying a loan that doesn’t have an extraordinarily low interest rate, as of this writing.
6) Try to exceed expectations at work. Our career, and professional reputation, can go a long way to determing our financial future. It’s good to focus on making sure that our jobs are to some degree protected, but also on advancement and career progression.
7) Set aside money for your next car purchase. Even if you’re years away from your next purchase, start saving now. Make a “car payment” to a separate car fund
8) Before purchasing something, ask ourselves if we really need it. I think at some base level, most of us probably know the difference between what we really need, and what we simply want. Or, at least I’d like to think that many folks get this. Even so, most of us slip up from time to time in terms of acting upon this knowledge.
9) Sometimes, just treat yourself and live in the moment. What? Am I contradicting what I just mentioned above? Perhaps, but in reality I mean that once in a while, we should just buy what we want as long as we aren’t breaking the bank. Perhaps getting that $5 coffee drink, or buying that outfit, or going to that game would provide you with a lot of enjoyment. Well, sometimes you just have to go do it. Life is short, let’s enjoy it. If we’re practical 100% of the time, why not cut back to 99%?
10) Look to find an opportunity to help someone in need. Sure, this can take on non-financial ways as well. But if we truly value money, and don’t like to part with it, then it’s making a sacrifice when we give to someone in need. Something reasonable can go a long way to help, and is especially nice to do when we expect nothing directly in return. When karma finds us later, we’ll be happy! As an adjuct to this, let’s make sure that we don’t get taken advantage of by moochers and freeloaders in other areas of our life.
My Questions for You
What do you think about the notion of getting a head start on new year’s resolutions?
Are any of these above applicable to you?
Do you have any others to add?