5 Financial Resolutions to Make in the New Year

The gifts, travel and indulgent meals of the holiday season can hit your budget hard. So, it’s no surprise that New Year’s financial resolutions are popular. This time of year is the perfect time to plan for the months ahead. 

A close look at your finances can help you spot ways to increase your income, trim your expenses and plan for things you’ll need to pay for throughout the year. 

We’ve put together a few financial tips for the new year that will help you get off to a smart, fiscally responsible start in 2024.

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. For example, if you sock away money in a high-interest savings account, the interest you earn is passive income. You don’t have to do anything, and the money gets added to your account. You can spend that money or leave it in the account so you earn even more interest going forward.

If you don’t think you can afford to invest, you might be surprised. For example, apps like Acorns can round up your purchases to the nearest dollar and move the change into an investment account. While that might not sound like a lot, when you think about all of the purchases you make in a month or a year, it can add up. 

You can also join a peer-to-peer lending program like Prosper with as little as $25. With these programs, you help provide loans to borrowers, and you receive payments back, plus interest.

Goal 2: Look for Ways to Tap Into Cash

Looking to 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. Not a fan of strangers staying in your home? With Neighbor, you can get paid to let someone store their stuff in your empty space.

If you have toys, tools, clothing, sporting equipment, electronics or household items you’re not using, try selling them on sites like eBay, Craigslist or Facebook Marketplace.

And if you have a car and some time to spare, consider driving for Uber or Lyft or delivering for Instacart, DoorDash or Grubhub. Companies like these give you the flexibility of working on your own schedule. 

Goal 3: Streamline Your Subscriptions

It’s easy to lose track of the streaming apps, delivery services and other subscriptions you’ve signed up for. Many of them cost just a few dollars a month, so they can seem affordable, but over time the regular monthly charges add up.

As part of your New Year’s resolutions for finance, take a close look at your bank and credit card statements and reassess your subscriptions. Some of them might make sense. For example, a regular order of coffee beans can help you save money if it means you’re not stopping for coffee on your way to work every morning.

But in other instances, subscriptions can derail your budget. Maybe you signed up for a streaming service so you could watch a favorite series. The series may have ended, but the charges still hit your account every month. Now is a good time to look through your subscription spending. Keep the ones that help save you money or make your life easier and cancel the ones that don’t.

Goal 4: Automate Everything 

When your financial life manages itself, you can save money. Take a few minutes to set up autopayment, so your bills are automatically debited from your account. This helps you avoid late fees or credit dings and eliminates bill-pay hassles. Plus, some companies will give you a monthly discount if you set up autopay.

You can schedule your credit card payments to be automatically debited, too. If you can, aim to pay the full balance every month. If your financial resolution is to pay down your debt, pay more than the minimum amount and stop using the card.

You can automate saving money, as well. Set up a transfer from your checking account to your savings account that’s timed to your payday. Pushing the money into savings right away means you’re less likely to spend it unless you really need it. 

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 that aren’t tied to your employer, set up automatic contributions. (Of course, just because things are automated doesn’t mean you should stop checking in on your accounts.)

Goal 5: Set Specific Savings Goals

“Save more money” isn’t a goal, it’s just an idea. It won’t magically happen without a plan. Plus, devising a strategy can be tricky if you don’t have a detailed objective in mind. Ask yourself why you want to save money and how much you need. 

You may want to increase your emergency fund by $3,000, save $1,000 for a vacation or put aside $750 for the new tires your car will need by the end of the year. Outline the specific steps and create a budget to meet your savings goals. Your financial resolutions goals (and the corresponding plan) should be realistic as well as specific, so you can achieve them by the end of the year.

Develop a Plan

Need help figuring out the best plan to put your New Year’s financial tips into practice? Talk to a Farm Bureau agent today to get your savings plan started on the right foot.