These three (3) financial resolutions for the New Year could put an extra six grand in your pocket throughout 2022 – that’s $500 per month! Let’s talk about them.
Hey MoneyLion, my name’s Austin Hankwitz and I talk about personal finance and investing online. I grew up in a small town in northeast Tennessee and have always been obsessed with making my money go further. So in this video, I’m going to share with you three things I’ll be doing this new year to put some extra coin in my pockets.
And don’t worry, these resolutions do not include earning more money – but instead being smarter with the money we’ve already earned.
Number one, and it sounds really simple, but create that first budget. Instead of looking at a budget as a restriction on your spending, look at it as a permission to spend what’s been budgeted. Personally, I use the 50, 30, 20 rule when building my budget – which means 50% of my monthly take-home goes toward needs, 30% goes toward wants, and 20% goes toward paying down debt, building a savings, or investing for retirement.
Number two, pay more than the minimum on your credit cards. By just paying the minimum balance every month, you’re in debt longer, racking up interest charges, and could be putting your credit score at risk. Having the flexibility to only pay the minimum balance when facing a financial emergency is great – but don’t make it a habit. By paying twice the minimum balance every month, you’ll find yourself out of debt much faster while saving thousands of dollars in the long-term.
Number three, be smarter about food. When I’m looking through my monthly card statements, some of my largest expenses end up being on meals or dinners out. While I’m not saying this is something you should remove from your life, being wise about how we spend money on food can help you start the new year with your money under control.
For this reason – I learned how to cook! This has helped me save hundreds per month on unnecessarily expensive takeout.
Another good idea could be visiting your local discount and wholesale stores. For example, I get the bulk of my groceries at the local ALDI – they have much cheaper prices than the Whole Foods down the road.
Financial goals often come with a negative connotation. I’m not saying you should let go of
things you love – just encouraging healthy budgeting, responsible credit card monitoring, and strategic spending.
The New Year allows us to reflect and set new goals. Goal setting helps us realize more of our potential and exceed expectations. New Year’s financial resolutions help us stay prudent and guide us on the path to a comfy retirement.
Making more money with a side hustle adds more money to your pocket. However, you can also set New Year’s financial resolutions that add money to your pocket without putting more work into your schedule. We’ll reveal the resolutions below.
Resolution #1: Create your budget
Some people shy away from budgets to avoid restrictions. Instead of seeing budgets as restrictive, view them as permission to spend on items that fit within your budget. This mindset shift highlights the value of budgeting and helps you prioritize your purchases.
The 50-30-20 framework acts as a reliable compass for budget planning. The numbers within the framework explain how to allocate your funds:
- 50% of your budget goes towards needs
- 30% of your budget goes towards wants
- 20% of your budget goes towards debts, saving, and investments
A budget helps you monitor your expenses. Staying on top of each purchase you make will lead to better decisions, which will result in more money in your pocket.
Resolution #2: Pay more than the minimum on your credit card
Credit card companies won’t bother you if you pay the minimum. However, stopping at the minimum leads to interest fees. Credit card companies will continue charging interest on your remaining principal. Exceeding the minimum helps you make a more significant dent in your principal.
Stopping at the minimum helps during emergencies. However, you should not make it a habit. Creating a budget gives you more money to exceed the minimum. You get closer to wiping out your credit card debt when you exceed the minimum.
Resolution #3: Be smarter about food
We all need food to survive, but some food expenditures aren’t necessities. Some people buy extra snack food that doesn’t add any nourishment. It’s also tempting to buy takeout food or dine out too often instead of cooking for yourself.
Cooking for yourself saves money, and as you get better at cooking, the food will taste better than takeout anyway. Buying food at wholesale stores can also help you save money. We can get cost-effective food without sacrificing health and nourishment. Review your grocery bill and see how you can make smarter purchases.
New Year’s financial resolutions help you grow
New Year’s financial resolutions give you more choices. Extra money in your pocket helps you fund a vacation, a college education, rent payments, and other costs.
We shouldn’t let go of the things we love. However, smart spending can go a long way when it comes to creating greater financial possibilities. These goals act as a solid starting point.