5 Financial Resolutions To Make (And Keep) In 2018

By Julia Dunn on January 6, 2018

When you ask people for their New Year’s resolutions, most will mention something about improving their fitness, drinking more water,  spending more time relaxing, or eating fewer sweets (to name just a few). These are all great! However, financial resolutions are also common and they can make a huge impact on your lifestyle if you actually keep to them. Resolving to manage your finances more intentionally is also one of the most attainable and measurable goals you can set, because the results are numeric. Here are the most useful financial resolutions to make for the new year.

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1. Don’t overspend on your credit card

Credit cards do allow you to some degree to spend money you don’t have, but really, it’s best to think of it as another form of your debit card. In other words, don’t spend money on your credit card that you won’t or don’t have on your debit card to pay the balance back in full. While we’re still talking about credit cards, you can also resolve to pay all your statement balances back right when they’re due (if you’re someone who usually only pays the minimum amount due). Many people advise to only spend around 20-25 percent of your credit line to keep your spending in check, and this tip has certainly helped me to use my credit card as an accessory and not as a main method of payment.

2. Create a budget and actually follow it

For those who enjoy spending money recklessly or without any awareness of whether they can afford to be spending what they’re spending, a budget can provide much-needed structure to their financial lives. You can make budgets using spreadsheets, calendars, even the internet is full of budget templates in various styles to accommodate your needs. As a Bank of America user, I’ve even found that the Bank of America mobile app has a feature that tracks the amount of money you spend per month versus your monthly income. This feature also shows you a pie chart that illustrates the categories in which you spend the most (i.e. food products, entertainment, rent).

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Tip: when creating your budget, be very realistic. You’ll probably need a budget category called “miscellaneous” or “random expenses” to cover that last minute dinner outing with an old friend, or to cover a random sale at your favorite clothing store that happens to have marked down your favorite shirts at 75% off.

Always account for real life when you anticipate your spending—and know your money habits well enough to plan for deviation in your budget. You may think you can follow your spending schedule exactly down to the cent, but it’s pretty rare to do so. Build into your budget some room for flexibility.

3. Increase your savings little by little

When you get your paycheck, try not to deposit the entire thing into savings. Depending on what you’re financially able to save, even putting $5-10 of your paycheck into your savings account is a smarter choice than ignoring your savings altogether. The higher your savings, the more interest you’ll make on it, and the safer your safety net will actually be. If you are able to afford putting even $100-200 or more into savings, that’s even better!

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4. Keep your savings account a true savings account

In the past, I’ve been that person who will transfer $80 from savings to checking to erase the fact that I just spent $80 on a cool pair of shoes I may not have needed (and hadn’t planned to purchase when I made my budget).

Don’t be that person!

Your savings account should be reserved for emergencies (medical, unemployment periods, rent, student loans)—not as a bank of money you can use to nullify purchases you made outside of your checking account budget. Pretend as though your savings isn’t really there, unless there is a dire financial emergency that calls upon it. This way, you’ll get into the habit of taking your checking account money more seriously without treating savings accounts as reasons to spend more money on fun stuff.

5. Set aside a spot for loose cash

One helpful tool I came up with for money management? The “fun jar.” I decorated a mason jar and designated it as the place to stash any extra cash or unexpected money that I might want to use for strictly fun activities and items. I consider this money separate from my main budget and draw from it whenever I want to pay for something spontaneously, like a trip out for dessert. This is great for people who would otherwise deviate from their budget when friends call you to propose a last-minute night out.

Making financial resolutions for 2018 will have an extremely positive effect on your year. Money is tricky enough for anyone to manage, but learning more about how to keep track of your spending will improve your greater financial security and ease your stress especially if you’re a low-income student. These are financial resolutions to keep year after year. Happy new year to you and your bank account!

By Julia Dunn

Uloop Writer
A writer, editor and educator based in Northern California.

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