Dec 15

Dec 15 8 Financial Resolutions Worth Making

The new year is only a few days away as I write this, and I am focused on thinking about my financial goals for the upcoming year. You guys, few things are more empowering than taking charge of your finances, getting control of your money, and eliminating financial stress.

When I became debt free in November 2019, after paying off over six figures of student loan debt, people asked me how it felt. And let me tell you, I felt invincible. After conquering that mountain of debt, I felt like I could do anything.

And I want that feeling for you, too. Trust me, there is a peace and empowerment like nothing you’ve ever experienced that comes with finally getting your money under control.

That’s why I’ve gathered a list of 8 financial goals worth tackling in the new year. So here goes!

Eight Financial Resolutions Worth Making

Decide on your Short and Long Term Financial Goals

A lot of people skip over this goal-setting step, but it is a crucial first step in any successful financial plan. Have you ever heard that quote, “If you don’t know where you’re going, you just might end up there?” The same applies here. If you don’t know what you’re trying to accomplish with your money, you’ll never get there.

So take a few minutes to decide what you’re trying to accomplish. Do you want to become debt free within 12 months? Save up a 20% down payment on your first home? Cash flow your upcoming wedding so you can begin your marriage without debt? Max out your 401(k) by year-end?

Write down your short term, mid-term, and long-term financial goals. Then put them somewhere you can see them daily to remind you what you want to achieve.

You can get the Financial Goals printable above as part of my Free Resource Library to get started.

Start Making and Using a Budget

This is hands-down my #1 recommendation for anyone wanting to take charge of his or her finances or pay off debt. Using a budget is life changing, guys. Life changing. And you simply cannot master your money without one.

There are so many misconceptions about budgeting—I won’t be able to spend money the way I want to if I budget, its complicated, it’s time consuming, it means I’m poor—but none could be further from the truth.

The truth is a budget gives you freedom to spend. With a properly functioning budget, you’ll know exactly how much you have to spend in any category—and that alone will help eliminate so much financial stress. For tips on how to get started budgeting, check out these posts:

How To Start Budgeting When You Have No Idea What You’re Doing

The Budgeting Routine That Will Change Your Life

And you find my budget forms here.

Save An Emergency Fund

If you don’t have an emergency fund, you are living on thin ice. And honestly, who wants to live with that kind of stress? When unexpected expenses arise—and trust me, they will—you need to be prepared. Without an emergency fund, you may be forced to use credit cards, digging yourself deeper into debt. So, make a commitment this year to save up an emergency fund once and for all.

I recommend at a minimum, one month’s worth of living expenses in a savings fund.

Get Life Insurance

The general rule is that you need life insurance if you have dependents—someone who depends on you financially. Typically, when we think of dependents, we think of children who are too young to support themselves. But, dependents can also include spouses who depend on your income for support (whether they bring in a separate income or not), spouses who depend on a service you provide (like staying home with the kids), or even ailing family members or other relatives whom you support financially.

If you don’t have life insurance, make it a priority this year to get some coverage in place. See this post to answer all your FAQs about life insurance including how much life insurance you need, whether you should get term or whole insurance, whether you should wait until you’re debt free to get life insurance, whether employer-provided life insurance is enough, and many more.

Get a Will

A will is a legal document that dictates the distribution of your assets upon your death. Without a will, state law will decide how your assets are distributed. Additionally, if you die without a will, your heirs may be forced to spend time, money, and emotional energy to settle your affairs. To make sure your wishes are carried out upon your death, take steps this year to get your will in place.

Open a High-Yield Savings Account

A high-yield savings account (HYSA) is an account that pays you significantly more in interest than a traditional savings account. Most high yield savings accounts are with online banks, and because online banks don’t have the expenses of maintaining brick and mortar branches, they can pass the savings on to you in the form of interest rates that are 5-25 times the national average.

Many of the most popular high yield savings accounts are offering APY rates of 1.60% - 1.85% right now, whereas my traditional savings account with Wells Fargo is offering 0.01%. Yep, 0.01%. If you live in Texas, one local credit union (TDECU) is offering 3.00% right now—that’s incredible, and can mean hundreds of extra dollars in your pocket, for literally doing nothing.

Opening a high yield savings account is a goal that has been on my list for a while now, even more so now that I’ve moved on to Baby Step 3. And after doing these calculations, switching is a no-brainer for me, and one of my top goals for the new year.

UPDATE: I did open a HYSA with Ally Bank and have loved banking with them every minute. But, you don’t have to take my word for it. Bankrate and Nerd Wallet publish a list of the best HYSAs every month (the ones with the lowest fees and offering the highest interest).

Here’s what it’ll look like in action.

Let’s assume I keep $15,000 in my savings account once I complete Baby Step 3.

With a Wells Fargo savings account, earning 0.01%, I’ll earn $1.50 in interest for the year.

With an online savings account earning 3.00%, I’ll earn $450 in interest for the year.

Would you rather have $1.50 or $450? Seriously, you won’t make an easier financial decision than this one.

UPDATE: The interest rates being offered by HYSAs are significantly lower now than when I first published this blog article. While not as high as they used to be, they are still higher than you’ll find with any traditional brick & mortar bank.

Commit to Paying off Debt

In the words of my 8-year-old “Debt steals all your money.” Someone’s clearly been listening to mama!

But seriously, there are sooo many reasons to pay off debt. When you don’t have debt, you have less stress, more peace, more options, you have the ability to spend your money on anything you want, and you have money to invest for your future, just to name a few. If you’ve been toying around with paying off your debt, make this year your year to commit and get it done.

For more information on paying down debt, see these posts:

10 Characteristics of Those Who Pay Off Debt Fast

Six Things to Do Before Paying Off Debt

How to Pay off Debt With the Debt Snowball

How to Pay off Debt with the Debt Avalanche

And to find out all about the steps my husband and I took to pay off over six figures of debt in three years, check this out!

Get on Track with Retirement

If you outlined your short and long term goals above, one of your long term goals was likely to be able to retire with sufficient money to meet all your needs. I’m pretty sure “be a burden on my children” or “attempt to live off social security alone” were not among them.

A while back, I polled my Instagram audience and asked them what their biggest financial regrets were, and among the most cited was “not saving for retirement sooner.”

If you know anything about compound interest, you know starting early is the key. Let this year be your year to start saving for retirement, max out your 401(k), or open up that Roth IRA.