New Year, New Financial You: Expert Tips for a Fresh Start
As the clock strikes midnight on December 31st, many of us will be reflecting on our financial goals for the upcoming year. Whether you’re saving to move out of your parents’ house, pay off student loan debt, or simply build a safety net, financial resolutions can help you stay motivated and focused.
Reboot Your Relationship with Money
According to Ashley Lapato, personal finance educator for YNAB, it’s time to rethink your approach to money. Instead of viewing finances as a chore or a source of shame, try to see them as a means to achieve your desired lifestyle. Ask yourself questions like, “What do I want my 30s to look like?” or “What do I want my 40s to look like?” and use your financial goals as a way to get there.
Know Your Why
When setting financial resolutions, it’s essential to establish the “why” behind each goal, says Matt Watson, CEO of Origin. Whether you’re saving for a down payment on a house, paying off credit card debt, or taking a dream vacation, being clear about your motivations can keep you driven. Watson also recommends using a tool, such as an app or spreadsheet, to track your progress.
Budgeting 101
After three years of inflation, it’s more important than ever to create a budget that works for you. Greg McBride, chief financial analyst at Bankrate, suggests making a monthly budget for 2025 and tracking your spending against it throughout the year. Don’t be afraid to make adjustments as needed, and remember to transfer any excess funds into a high-yield savings account.
Tackle Outstanding Debt
With interest rates unlikely to drop anytime soon, paying down debt should be a top priority. Start by taking stock of your current debt and making a plan to tackle it. Consider looking into 0% balance transfer offers or low-interest personal loans. And don’t be afraid to negotiate with your creditors – you may be able to secure a lower interest rate simply by asking.
Take Control of Your Credit
Matt Schulz, chief credit analyst at LendingTree, emphasizes the importance of taking control of your credit card interest rate. Consider using a 0% balance transfer credit card or low-interest personal loan to reduce your debt. And remember, you have the power to negotiate with your creditors – a simple phone call could result in a lower interest rate.
Set Realistic Goals
When planning your financial resolutions, it’s essential to consider how you’ll make them sustainable for your lifestyle. Set realistic, practical goals that you can stick to, and don’t be too hard on yourself if you encounter setbacks. Remember, it’s a marathon, not a sprint.
Stay on Top of Your Credit Score
Rikard Bandebo, chief economist at VantageScore, recommends checking your credit score monthly to stay on top of your finances. Make sure to pay more than the minimum on your credit accounts, and consider automating your savings to make it easier to stick to your goals.
Protect Yourself from Scams
Johan Gerber, executive vice president of security solutions at Mastercard, emphasizes the importance of slowing down when making financial decisions. Don’t let scammers use urgency to trick you into making a mistake – take your time, and consider building an accountability system with loved ones to keep yourself safe.
Focus on Financial Wellness
Finally, remember that financial wellness is just as important as financial literacy. Alejandra Rojas, personal finance expert and founder of The Money Mindset Hub, suggests setting goals that focus on your relationship with money, such as addressing financial trauma or talking more openly with loved ones about finances. By prioritizing your financial wellness, you’ll be better equipped to achieve your financial goals.
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