8 New Year’s Resolutions That Will Save You Money

When it comes to money, setting New Year’s resolutions for yourself is easy, but committing to and following through with those resolutions is a completely different story. This is why it is important to set realistic and achievable financial goals for yourself. There is hardly a quicker way to shove those New Year’s resolutions aside than to realize that they are unattainable or that you have set the bar so high that only Warren Buffett himself could achieve them. That being said, here are a few ideas for money-saving New Year’s resolutions that are set to reasonable levels and thus promote continued progress throughout the year.

1. Become debt-free
Let’s start with the big one first – freeing yourself from debt. Whether this is a realistic and attainable goal is really dependant upon your financial and debt situation. How heavily you are in debt, what type of debt you hold (credit, car loan, mortgage, etc.), your income level, and the interest rates pertaining to your debt can all play into how quickly or how successful you are in becoming debt free.

It is often important to start with reducing credit card debt first since it will likely have the highest interest rate. Smaller debts amounts are also good spots to begin so that you build a little confidence by crossing them off your debt list, leaving you to focus on more problematic debt issues.

2. Make extra mortgage payments
Resolving to make an extra payment or two toward your mortgage can be a great way to start the year. By making an extra payment each year, not only are you reducing the time and amount it will take you to pay off your home, but you will be reducing the amount of interest those greedy banks receive. Since most mortgage interest rates are well below those of credit cards, it is important that you review any other debt with higher interest rates that may need to be dealt with first, before putting extra money toward your mortgage.

3. Find ways to generate side income
Picking up extra income can be a wonderful financial resolution. In a suffering economy, the peace of mind and supplemental income that comes with a second job or side business can be a great buffer against the stresses of economic strife. Even an extra hundred dollars a month can be a great way to reach other financial goals like paying down debt, making an extra mortgage payment or starting an emergency fund.

4. Start a rainy day fund
If you don’t have one already, starting an emergency fund can be a good New Year’s resolution. You never know what tomorrow might hold when it comes to your finances, but with an emergency fund, you can face the unknown with a bit more confidence. While some financial gurus call for you to have $500 in the bank, you may want to stash a bit more than that. $500 won’t get you far these days, especially if you lose your job. Even one or two months of your average income can go fast, so build up a fund you’re comfortable with. Bear in mind that if you have outstanding credit card debt, you might want to deal with that first to eliminate those costly interest payments.

5. Invest in your retirement
It’s never too early to start planning for retirement – and these days it’s hard to count on anyone but yourself to do it. Setting aside money for the future, whether in an IRA, 401k, 403b, or even just a savings or checking account can start you on the path to a financially secure retirement.

6. Understand your investments
It is amazing just how many of us hold investments that we know little about. Nothing illustrates our lack of financial education better than the recent mortgage meltdown where many homeowners had no real understanding of the mortgages to which they had committed. Many of us associate understanding our investments and financial situation with knowing what stocks we own or how much we’ve contributed to our 401k. Those are great first steps, but to commit further, we should understand topics such as where that money is invested, how much our credit costs us each year, how our Social Security benefits are calculated, and other similar financial information.

7. Learn to save
Learning to save sounds easy, but it doesn’t happen overnight. Becoming accustomed to money-saving techniques can be a lengthy and involved process, especially for those of us who haven’t had much experience with it. Using coupons, looking for store discounts and sales, tracking our expenses, and utilizing a budget are skills many of us have learned to do without until recently. A fresh year provides the perfect excuse to buckle down and become familiar with the saving process.

8. Build a budget
Starting off the year with a budget is an easy resolution that can be completed while watching television or soaking in the tub. Your budget doesn’t have to be in a fancy spreadsheet with graphs and charts. A simple, hand-written list of expenses and incomes can get you started, and can be expanded later if needed. The hard part of this resolution is committing yourself to watching, modifying, and adhering to your budget over the course of the year. Consider putting your budget in an easy to see place like your refrigerator or computer desktop so that it will be a constant reminder of your financial goals and your commitment to those goals.

Mark is a writer who works with an Australian website called Credit Card Compare that offers easy credit card comparisons andĀ helps consumers find the best card available for them.

  • Connie

    Debt is paid off. We were tantalized this morning with an opportunity to re-enter debt…YAY!!! There is a Canadian tax credit that gives incentives to do work on your house. We are going to be needing a furnace in the next few years and we got it for about 1/2 price because of all the government rebates. And we paid cash. We would have been able to replace our AC unit too but that would have required debt. They charged a 6% fee for just using the service and then 9.9% interest AND a $49 fee. RIPOFF!!!! NO THANKS.

  • Anne G

    Great list! My husband and I have #1 done, and I’m hoping to make some progress on #2 and #3 this year.

  • http://www.artificialrobot.com Sean

    Great list, I think I’d most like to work on understanding my investments this year. I’ve always picked my retirement funds based on general allocation plans without much thought to the underlying funds. I’m planning to pay closer attention to the prospectuses and such that come in and learn as I go. Good luck to everyone with their goals.

  • http://www.creditcardcompare.com.au Credit Card Compare

    @Connie – Good on you Connie for getting out of your debt. Resist debt!
    @Anne – Thanks for the compliment and all the best for the year ahead.

  • Gina

    We have always been responsible with our money, but realized recently that we could be doing much better. My husband and I have FINALLY started budgeting and are sticking with it! It certainly is not easy, but we are already seeing results.

  • Linda

    I have to wonder if it makes more sense to save up enough to make one or two extra mortgage payments a year, or just to add that money to your current payment every month. It’s a smaller sum, but it eats away at the principle sooner, doesn’t it, reducing debt.

    Otherwise though, great list! :D

  • Mike

    Paying down debt is our goal. We know we won’t finish this year (law school and grad school loans), but hope to knock out a big chunk.

  • Zach Younkin

    Great list.

    I’m working thru #1, 3, 5, 7 and 8. It’s tough but so worth it.

    I am wondering, however, why the post is titled 10 New Year’s Resolutions when there are only 8?

  • http://www.increasenow.com Pastor Jim Kibler

    Great ideas. Now if I can just keep all of them.

  • Dale Wyrick

    I started doing small side jobs to generate extra income. I am student and I find that working free-lance jobs leaves me more flexibility for my schedule and generates more income than a previous traditional job.

    I love making my own schedule.

    this is something i am dedicated to continuing for the year.

  • Mac

    All are good ideas that I’m sure we’ve all heard before, but many of us still don’t follow (me included). Though I’m now working on #8 (budget) by using YNAB (You Need A Budget) software. I’ve never had a budget before, but just balanced my checkbook/cc’s each month…it’ll sure be nice to know I have the money there each month.

  • http://money-shenanigans.blogspot.com/ csdx

    Am I blind or are 9 and 10 missing?
    I was about to claim number 1 as done, but I guess as it states, a mortgage is still technically debt, so that means working on point 2. Also while it is more satisfying to make one big extra payment, it actually is slightly better to consistently send in a bigger payment each month (less time for interest to accrue on that principle).

  • Audra

    I totally agree with the point about making extra mortgage payments. I always try to do that, even if it’s just $10 more. It’s amazing how many payments you can shave off your mortgage by doing that. I think there’s even calculators on the internet that can figure that up for you (say if you wanted to know how much you would save over the longrun if you pay “x” amount extra each month.)

  • http://www.yourfinances101.com/blog David/Yourfinances101

    Generating side income is a great one.

    Through no plan of my own, I started two businesses this year (while also keeping my regular job) and have been able to generate a great bit of extra income.

    Find something you’re passionate about, offer a product people want, and work hard.

    The rest will come.

  • MarilynBr

    When that last final, big remaining debt is paid off, immediately set up a bank account and have that same amount of money automatically direct posited into the account. You won’t miss it, and it’s surprising how soon the savings begin to build up.

    • MarilynBr

      I wasn’t clear. When you have that final debt payment made, have the same amount automatically direct deposited each month into a saving account.

  • http://www.greenandchic.com/blog Carla

    These are great, simple goals that should be easy to accomplish. Having a side job or business is a great one as long as you don’t burn yourself out!

  • http://angelretreat.wordpress.com lorrie

    this year i am putting half my earnings from each check in my savings account and saving up and watching what i spend, still need to get extra earnings but I am getting by

  • http://www.chasingprosperity.com thriftygal

    I started #8 (budgeting) this year as a resolution, and it’s given me a whole new perspective. Makes you think twice before buying that afternoon snack or going window shopping. I’m struggling with #3 and #6 though. They’re not as simple and straightforward as the rest.

  • Lauren

    I’ve done most of these on the list. However, I am going to focus on #3. I’ve never given much thought to earning supplemental income. I’ve always focused on getting a higher-paying job. But I now realize that I can do both. I’m excited by the prospect!

  • http://www.insurancerates.com Leonard

    An emergency fund is a great way to make sure you don’t need to rely on credit cards when the going gets tough.

  • Karmella

    Really good idea about understanding my investments. I need to do more of that. I really just need to pay better attention overall – I am considering setting aside a dedicated time each week just to go through financial stuff and keep it in my mind.

  • http://grandgiveaways.wordpress.com Mami2jcn

    My husband and I haven’t had any credit card debt since early on in our marriage, but we didn’t really start investing until last year. It’s amazing how quickly the money adds up. We’re so glad we paid off student loans and credit cards in our early 20s so that now in our 30s we don’t have that financial burden hanging over us and we can invest for the future.

  • DG

    I am building a budget for 2010 and am glad it’s on this list. I have a nice little spreadsheet laid out and I am trying to get used to updating it with weekly monetary actions

  • Elizabeth I

    I would like to offer two other ideas. 1)Figure out the best time of year to make yearly purchases. We buy clothes at the beginning of January when everything is on sale and at the end of summer when everything is on sale. 2) resolve to find a best price for something (like an oil change) and start scouting a month before you need an oil change to find the best price. You may save only $5 but if you get your oil changed every two months it is still $30.

  • jeccica simpson

    #1 goal is #1 for me, Become debt free! Our family has made it a goal to pay cash for everything, if you dont have enough dough, you dont need it. We hope we attain our goal and resolution soon!

  • JuliaA

    good tips! my most important ones are a budget, a rainy day fund, and learning to save.