7 Favorite Money Resolutions From Experts (in Case You Can’t Decide on One)
Written by
Dawn Allcot
Edited by
Angela Corry
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That time of year is approaching when people make resolutions to eat better, get in shape, save money or organize their life. It’s typically wise to focus on one or two measurable goals than to try to become a completely “new you” in the new year.
“One of the biggest money mistakes people make is doing too much at once, attempting to optimize everything, track everything, tweak everything. That could ultimately lead to burn out and abandoning goals altogether,” said Julie Guntrip, head of financial wellness at Jenius Bank.
“Focus on consistency, not perfection,” Carolina Paradas, U.S. General Manager at ShopBack, agreed.
We spoke with money experts to brainstorm ideas for money resolutions you can make. Don’t get overwhelmed; choose one or two on this list and you should start to see a big change in your financial future by February.
“Start with one achievable habit … and build from there,” Paradas said.
Automate Your Savings
Guntrip, along with other experts, recommended establishing an automatic transfer routine to start building that first $1,000 in an emergency savings account. “Set up weekly or bi-weekly transfers into a high-yield savings account and let your earnings grow in the background while you live your life,” she said.
Look into high-tech tools and apps to help you save, as well, Paradas suggested. “Find ways to earn or set aside money automatically through your everyday purchases,” she said. “Earning rewards on what you already buy can compound into real financial impact over time.”
For the self-employed or gig workers, setting aside money as it’s received — and before you can spend it – is even more critical. In addition to saving at least 5% of all your income, it’s important to think ahead for tax time.
“Automate a tax set-aside,” Duncan Barrigan, CEO and founder of AI-powered accounts receivable platform Lunos.ai, advised. “Sweep a fixed percent of every deposit into a tax sub-account.”
How much to save depends on your circumstances and whether you have W-2 income and withholding taxes to offset some of the self-employment taxes.
Get Set for Tax Season
Employees and independent contractors, alike, should have their mind on April’s tax deadline, which will be here before you know it. If you haven’t been tracking income, expenses, and deductions carefully, use the new year to get organized.
“Keep a documentation drawer,” Barrigan advised. “Save contracts, major asset receipts, home office details, and mileage summaries.”
For homeowners who are W-2 employees, this may also include tax-deductible home improvements, healthcare expenses, and college receipts.
Capture Your Full Employer Match On Your 401(k)
Employees should also take advantage of employer-sponsored retirement funds, especially if your employer offers matching funds.
“If the full match feels out of reach, start by increasing your contribution by 1% now, and another 1% mid-year. If you get a bonus or a raise, make sure that your retirement contribution gets some of that love,” Guntrip said. “Those small increments may be barely noticeable in your paycheck, but they could compound meaningfully over time.”
Review Your Investments
It’s a good idea to review all your investments before the new year rolls around. That way, you can take advantage of strategies like tax loss harvesting, which can help you reduce capital gains taxes from the sale of investments by taking a loss on other investments.
In addition to reviewing your portfolio balance and its performance, Maggie Kulyk, founder and CEO of Chicory Wealth, suggested evaluating whether or not your investments align with your values. “If you have money invested in the public markets … take a look at what’s under the hood,” Kulyk said.
Kulyk suggested using the nonprofit website AsYouSow.org to find out where the companies in a mutual fund, for instance, stand on social issues, governance, and sustainability. “An individual can get a better look at what’s actually happening inside their 401(k) and maybe choose to make different choices,” Kulyk said.
Lower Your Fixed Costs with a Bill Audit
Guntrip pointed out that reviewing your recurring expenses like insurance and utilities can free up money to meet your financial goals, whether that’s paying down debt, building emergency savings or bolstering your retirement fund.
“In reality, if you spend even one hour comparison shopping for your cell phone plan, car insurance, streaming services, or internet, you could possibly free up real savings per month,” she said.
Practice Intentional Spending
Once you’ve tackled fixed costs, evaluate your discretionary spending. “Slow down before you buy and make sure each purchase aligns with what truly adds value to your life, not just what’s trending or on sale,” Paradas said.
Intentional spending can also mean supporting brands that align with your values, which may not help you save money, but can turn you into a more conscious consumer. “Make a list of the places you go, the national brands you use, and do a little research to figure out their company policies,” Kulyk said. “You can’t boycott everything… but small efforts can make a huge difference.”
Consider Charitable Contributions
The new year is also a good time to look at the charitable contributions you’ve made in the past 12 months. Again, Kulyk recommended using online resources to see where your contributions are really going and the impact they make.
“Consider swapping out giving to mega-charities and focusing more on local nonprofits,” they said. “Often, those organizations are going to have the biggest impact in your home area. You’re going to be able to really get to know them.”
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