7 Money Resolutions You Should Be Making Based on Your Income
Written by
Cynthia Measom
Edited by
Chris Cluff
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When the calendar flips to Jan. 1, many people are overcome with enthusiasm — ready to make all sorts of New Year’s resolutions that they want to see come to fruition. And sometimes, those resolutions have to do with their financial situations.
According to a recent survey from Forbes Health/OnePoll of 1,000 U.S. adults about attitudes toward setting resolutions and top goals, 38% cited improving their finances as a priority. Among the top financial goals for 2024 cited in a recent GOBankingRates survey, saving more money and getting out of debt led the way.
But not everyone’s financial situation is the same, and your resolutions should be tailored to your specific financial needs and goals. Here are seven money resolutions you should be making based on your income.
If Your Income Is $25,000 to $34,999
“When you live off of a small income, you really need to have a budget in place that helps guide your spending and savings decisions,” said Erika Kullberg, founder of Erika.com, who is also an attorney and personal finance and debt expert.
“This year, make it a priority to really master a budget,” she continued. “Don’t just sit down on January 1st, create one and walk away. You need to check in with your budget every week and at the end of every month to make sure you are staying on track. You also want to evaluate regularly how to adjust your budget to make it work for you and where you can cut back expenses to make more room for meeting your financial goals.”
If Your Income Is $35,000 to $49,999
Kullberg said if you’re at this income and you don’t have much or any in savings, you’re setting yourself up for a hard financial blow if an unplanned expense comes up.
“At this stage,” she said, “saving for an emergency fund should be a top priority. Ideally, you want three to six months of income stored in a savings account where it can earn interest and grow. That way, if you lose your job or have a surprise medical bill come your way, you won’t have to turn to high-interest debt as a solution.”
If Your Income Is $50,000 to $74,999
If you’re making between $50,000 and $74,999 and already accomplished the previous resolutions, Kullberg said you can set a goal to become more aggressive about paying off your debt.
“Every month you have debt on your plate is another month where you are paying interest,” she said. “The faster you pay off your debt, the less interest you pay. In turn, this makes it easier to pay off your debt faster.
“If financially possible, make it a resolution in 2024 to pay off your debt with the highest interest rate in full. You should make all minimum monthly debt payments on any sources of debt — but [you] can put extra payments towards the most expensive debt so you can get it off your plate for good.”
If Your Income Is $75,000 to $99,999
At this income, “If you aren’t already saving for retirement, now really is the time to start,” advised Kullberg. “If you are making close to six figures, you should have room in your budget to make some contributions to a retirement savings account. If you work for an employer who matches some of your 401(k) contributions, you really don’t want to sleep on that opportunity, which raises your compensation for no extra work on your end.”
If Your Income Is $100,000 to $149,999
At this stage, Kullberg suggested, “if you don’t have any debt and already have a retirement savings plan in place, you can turn your attention to other savings goals this year.
“For example, you may want to save for a downpayment on a home. Decide how much you want to save by the end of the year and then divide that amount by 12. Add that number to your monthly budget so you know exactly how much you need to save on a monthly basis to meet your savings goal.”
If Your Income Is $150,000 to $199,999
“Congratulations on earning such a high income,” said Kullberg. “Now, it’s time to focus on how you can grow your money. Interest rates on savings accounts are expected to remain high in 2024, so don’t miss your chance to grow your wealth by putting your savings in a high-yield savings account, CD or money market account.”
If Your Income Is $200,000+
When you’re making this much money, be intentional with every move you make.
“If you feel comfortable with how much money you have in savings and are debt-free, you can start to invest your money,” Kullberg recommended.
“While there are no guarantees with investing, historically, investing in the S&P 500 leads to a return of about 10% annually (without adjusting for inflation). If you start investing now, over the years, you can really watch your wealth grow.”
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