5 Financial Resolutions Even You Can’t Mess Up

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As 2018 winds down, it’s time to start planning for a healthy and productive 2019. But instead of setting lofty financial resolutions that you’ll abandon faster than your gym membership, here are a few manageable goals to keep you on track in the new year.

Resolution #1: Top up your savings with automation.

Resolving to automate your savings in 2019 can make all the difference if you’re someone who has trouble stashing away cash. Financial institutions typically have an automatic transfer feature within an online account that lets you move money from checking to savings on a preset schedule.

How to make this resolution work

Choose a total dollar amount that you want to save by the end of the year. Divide that number by 12 months or the number of pay periods you have a year. This gives you the amount of money you need to save incrementally to meet your goal. Set up a monthly, semimonthly or biweekly transfer of this amount from checking to savings. The beauty of this strategy is that you don’t have to do anything to meet your goal besides making sure you have the money sitting in your checking account when the bank processes the transaction.

To help you along your savings journey, here are two additional savings tips from the pros:

  • Pro Saving Tip #1: Figure out your “why.” “It’s much easier to stay the financial course and to stay motivated when you [and your partner] are working toward goals that are aligned with your ‘why,’” said Frank Shields, a CFP based in Houston. Perhaps you’re saving because you want to travel more or retire early. Think back to what you value whenever you feel the urge to spend instead of save.
  • Pro Saving Tip #2: Give yourself an allowance. “Concerts, massages, weekend brunches and an occasional night out tend to be the first things people think to cut,” said Charles Adi, a CFP also based in Houston. Cutting out all excess spending is like going on a crash diet. You can get so frustrated with the lack of spending that you splurge and end up back at square one. Instead, Adi recommends setting up an “anything you want to fund” where you automatically deposit discretionary income. This account is what you can use monthly for fun stuff.

Resolution #2: Increase the contribution to your employer’s retirement plan.

If you’re getting a raise or you have some extra money to sock away, increase your retirement plan contributions. Make sure you read the fine print if you’re trying to max out the employer match. Some companies offer dollar-for-dollar matches while others have different conditions. “A common match formula is 50% of employee contributions up to 6% of their salary,” said Courtney Richardson, an attorney and tax professional based in Philadelphia.

According to Richardson, many people believe that they are taking full advantage of the match when they’re actually leaving some money on the table. If an employer matches 50 cents to your dollar, you may need to beef up your contribution to make the most of the match. In addition to your employer-sponsored plan, you may want to consider opening up your own Roth IRA or traditional IRA to squirrel away additional retirement savings.

How to make this resolution work

Get in contact with your human resources department if you have questions about the employer match. You don’t have to raise your contribution up to the max all at once. You could increase the contribution in small increments. Having more money taken out of each paycheck for retirement is another method of automatic saving with minimal effort from you.

Resolution #3: Use fintech apps to manage your dough.

If an Excel spreadsheet for your budget isn’t getting the job done, resolve to use financial technology (fintech for short) to get your financial life together. Many budgeting, investing, debt management and saving apps are available for free.

How to make this resolution work

Start downloading and trying a few money management apps. LendingTree, the company that owns MagnifyMoney, has a huge list of different money apps here. Below are some apps to get you started:

  • For basic budgeting, try EveryDollar. EveryDollar is a free app that helps you track your monthly spending so you can better manage your cash from day to day.
  • For wealth building, try Personal Capital. Personal Capital is a robust platform that helps you see the bigger picture. This app puts your asset accounts and debt accounts into one platform so you can view your net worth.
  • For automated savings, try Qapital. Qapital is an account that connects to your bank accounts and can save money automatically for you. You can set up fun savings conditions within the app like saving an amount whenever a celebrity tweets or according to the 52-week savings challenge.
  • For credit scores and debt solutions, try LendingTree: LendingTree’s app offers free credit monitoring and product offers that can save you money.

Resolution #4: Don’t take on new debt and do something about high interest rates.

Paying off all of your debt in one year can be a difficult undertaking for many people, said Adi. Rather than setting an unrealistic debt payoff goal, Adi suggests resolving to not take on any new debt in 2019, so you can work to pay down your current balances. Lowering your interest rates is another debt-related resolution you can set. Lowering interest rates on existing debt can help you get out of debt faster.

How to make this resolution work

The best approach for securing lower interest rates on your debt is shopping around. Many online lenders and some credit card companies will let you prequalify for competitive products without a hard pull. Here are a few methods you can use to lower your interest rates:

  • Try a balance transfer card with a low introductory starting deal: Some credit card products offer a 0% APR deal for a certain time frame when you open a new card and transfer the balance to it. The 0% APR can last for several months. Paying off your balance within the interest-free period may save you a bundle on interest charges. Check out our roundup of credit cards with the longest 0% introductory deals here.
  • Consolidate your debt with a personal loan: A debt consolidation loan is when you take out a new loan to pay off your other debts. Debt consolidation loans can have competitive interest rates when compared with credit cards and other high-interest debt products. LendingTree has a marketplace where you can shop for debt consolidation products.
  • Use a HELOC, home equity loan or cash-out refinance: For homeowners, borrowing from home equity via a HELOC or home equity loan could be a solution to consolidating your debt and lowering your interest rates. Another option is the cash-out refinance. A cash-out refinance is when you refinance your mortgage for an amount that’s higher than your current loan balance and you take cash out of the deal. Learn more about the benefits and risks of HELOCs, home equity loans and cash-out refinances here.

Resolution #5: Start tracking your credit score regularly.

Speaking of interest rates — improving your credit in 2019 can help you qualify for the best deals on new products and refinances. Your credit score may not jump 200 points overnight, but taking steps to monitor your score and clean up your reports can do great things for your credit.

How to make this resolution work

Thanks to the many credit monitoring products on the market, setting the resolution to monitor your credit doesn’t have to be difficult. Your financial institution is the first place to check for credit monitoring services. Some credit card companies and banks have started offering free credit scores and credit monitoring. You can find a list of financial institutions that offer those services here. We also have a guide with tips for getting the highest possible score.

Final word

The key to setting resolutions for 2019 is making them realistic and actionable. Don’t resolve to increase your savings by $10,000 without a strategy. Instead, resolve to take action in ways that will get you to your desired result.

Deciding to automatically transfer about $385 from your checking to savings each pay period (if you have 26 pay periods) puts you on a path to saving $10,000. Resolving to track your credit score monthly can result in you taking the necessary steps to increase it. Put in the work throughout the entire year and you’ll have something to celebrate at the end of 2019. Cheers to the new year!

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Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor here

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