80% of New Year's resolutions fail by February. Financial resolutions are often among them. But this doesn't mean you're destined for an empty savings account and paycheck-to-paycheck living.
The key is making the right resolutions—and then taking action to follow through.
Here are financial resolutions that actually work. Try one or try them all.
1. Save 15% of Your Income
"Save more" is a common resolution—but vague resolutions fail. Studies show goals are more achievable when specific.
Assign a specific percentage to save each month. A general starting point is 10%-15% of your income, depending on your debts, desired savings amount, and timeline. If you have wiggle room at month-end, increase it. If this isn't realistic right now, that's fine—focus on what you can do consistently and stick with it.
2. Split the Unexpected into Thirds
When unexpected money arrives (a gift, bonus, or extra project payment), direct it strategically:
- 1/3 toward debt payment
- 1/3 saved for investment
- 1/3 spent on yourself
This way, you reward yourself while working toward financial goals. If you're debt-free, use that third to build your emergency fund or invest in education/training that advances your career.
3. Choose Cash Over Card
Studies show you spend more when using a card versus cash. With cash, you're limited to what's in your wallet, and the visual reminder slows overspending. Many people view their ATM card as having unlimited funds—and don't realize the damage until checking their bank account.
Can't carry cash? Set up bank text notifications a couple times daily to create a similar visual effect.
4. Watch the Score
You likely know what a credit score is and how it works. If yours is damaged, there's still hope to fix it. Even if you've worked hard to improve it, continue monitoring it—small things like applying for a new credit card or a new job can dip your score slightly.
Set up a recurring reminder to check your score a few times a year using free credit monitoring sites.
5. Make a Monthly Investment
A healthy financial situation requires more than clearing debt and growing savings. A strong investment (or portfolio) is a powerful way to accumulate wealth. If you're new to investing, work with a financial planner to create an investment program that aligns with your goals and risk tolerance.
6. Create Some Padding
When building savings, emergencies and unexpected expenses often deplete accounts. You finally reach a comfortable savings level, then a car repair or job loss forces you to drain it.
Break the cycle by creating padding for bills—pay them ahead of time to build wiggle room. This lets you handle emergencies without touching your savings.
Reserve your emergency fund for true emergencies only (not nights out, no matter how deserved). If you're using it for non-emergencies, stop. Build another liquidity tier for discretionary items. It may require tightening your belt, but your future self will thank you.
7. Track Your Daily Expenses
At month-end, you wonder where all your money went. You barely ate out and made no major purchases—so why are you living paycheck to paycheck?
The culprit: small daily expenses add up. Your coffee order, forgotten online subscriptions, and other minor purchases create big leaks. Track expenses daily to see where your money actually goes.
Tools like You Need a Budget (YNAB) make this painless. The awareness itself often reduces unnecessary spending.
8. Put Yourself on Payroll
If you struggle to save but easily pay bills, treat savings as a non-negotiable bill. Write yourself a check alongside your other bill payments, then physically deposit it into savings. It's psychological, but it works.
9. Open an IRA
Most people don’t think about retirement planning until retirement approaches. And Social Security doesn’t stretch as far as it once did.
Start building a nest egg now. Think of it as paying your future self for the work you’re doing today. You’ll save on taxes and secure your future. If you can’t maximize contributions immediately, make it a goal and commit to increasing them over time.
10. Read a Personal Finance Book Monthly
The web is full of financial advice, but the best finance experts have distilled their knowledge into books. Commit to reading one new finance book monthly. It sounds like a lot, but reading just 10 pages each morning adds up to 12 books per year.
Plus, starting your day with financial wisdom sets the right mindset for smart spending choices throughout the day.
11. Bonus: Give Some Away
This might surprise you, but giving money away (through charity or donations) puts perspective on money's true value. The result? You're less likely to waste money on things you don't need.
Getting Started on the Right Foot
If your financial resolutions typically fail, you're not alone. Most people struggle to save consistently—whether for college, emergencies, or retirement. That's where professional guidance helps.
Work with a fiduciary financial advisor to create resolutions you can actually achieve and to stay accountable throughout the year.
Start a conversation with us to discuss how we can help you build financial resolutions that stick and achieve your money goals in 2023 and beyond.
