After all of the spending of the holidays, it can be downright scary to look at your finances come January. But now is the perfect time to plan for the year ahead and reconsider how you make and spend money. We’ve put together a few financial resolutions that will help you get off to a smart, fiscally responsible start.
Goal 1: Learn How to Earn Passive Income
Passive income is exactly what it sounds like: income you get without having to do much of anything. Talk to your Farm Bureau agent to discuss which options make sense for your portfolio. You can also try an app like Acorns or go for a peer-to-peer lending program like Prosper.
And there may be ways to make what you already have generate extra income. If you have an unused basement or a room over the garage, consider hosting a short-term rental space through a platform like Airbnb or VRBO. Do your research and find something that works for you and your lifestyle.
Goal 2: Streamline Your Subscriptions
What’s one more subscription to a streaming app or a meal delivery service? Well, before you know it, you’ve signed up for five different services that are charged to your credit card each month with a tally that’s more than the grocery bill. Yikes!
In some cases, subscriptions can support your financial resolution to save money, like if you order coffee beans so you can make your latte at home instead of buying one every morning. In other instances, subscriptions can derail your budget. For example, maybe you’ve signed up for a meal-kit delivery service but you find that you’re still grabbing takeout anyway and it’s going to waste. Keep the subscriptions that help save you money this year or make your life easier, and cancel the ones that don’t.
Goal 3: Automate Everything
Living in the digital age means we can set up our financial life to manage itself and save money in the process. This year, set up your bills to be automatically debited from your account. This helps you avoid late fees or credit dings and eliminates bill-pay hassles. You can schedule your credit card payments to be automatically debited, too. Pay the full balance every month or, if your financial resolution is to pay down your debt, set the payment for more than the minimum amount and stop using the card.
You can automate saving money, as well, so that the money becomes unavailable to spend unless there’s an emergency. Set up weekly recurring transfers from checking to savings. If you have a job with a 401(k), your retirement savings likely is deducted from your paycheck (before taxes), but if you have retirement accounts not tied to an employer, set up automatic monthly or quarterly contributions. Of course, just because things are automated doesn’t mean you should stop checking in on your accounts.
Goal 4: Set Specific Savings Goals
We often set vague financial New Year’s resolutions about saving cash. But saying you want to save more money and spend less isn’t something that will magically happen without a plan. Plus, devising a strategy can be tricky if you don’t have a detailed objective in mind. If, for example, you decide you want to increase your emergency fund by $3,000 this year, you can outline the specific steps and create a budget to do that. Your financial resolutions goals (and the corresponding plan) should be realistic as well as specific, so you can actually achieve it by the end of the year.
Develop a Plan
Need help figuring out the best plan for your financial resolutions? Talk to your Farm Bureau agent today to get your savings plan started on the right foot.