best financial resolutions

Top 10 New Year Financial Resolutions For a Stronger Financial Future

The start of a new year gives you a chance to rethink and reframe your approach to different aspects of your life, including your finances. For many people, managing money is an afterthought until something goes wrong. But what if this year instead of waiting to learn from your financial mistakes, you actively take control of your financial journey and set meaningful financial resolutions to guide your path?

This year we’re steering away from the typical “save more” or “spend less” advice, providing a new perspective on achieving meaningful change. These ten steps are all practically designed to line up with strong financial goals, and create habits that can help you in the long run. 

1. Clarify Your Financial Priorities for Strong Financial Resolutions          

A lot of people set financial resolutions with a vague sense of success, but clarity is key. Start by defining what really matters to you, ensuring that your financial resolutions align with your life’s priorities. List your short-term and long-term financial goals, such as “Save 20 percent of my income each month” or “Pay off credit card debt by this year’s end.” Try to define what success looks like in practical terms. By getting clear on your priorities and coming up with a reasonable plan of action, you will be able to allocate resources more effectively.

2. Automate Your Savings to Strengthen Financial Goals

One of the easiest ways to save money consistently is to automate the process. With automated savings, you’re less likely to spend the money elsewhere, and you’ll be building wealth without even thinking about it. Create an automated direct deposit from your checking account to your savings or investment account. Even small amounts, such as $50 per paycheck, can grow significantly over time. If your employer offers a 401(k) or similar plan, make sure your contributions are enough to take advantage of any available match. Treat your savings like a bill, prioritizing it just as you would your rent or utilities, ensuring it’s non-negotiable. Automation takes the burden off and helps you save consistently, even when life gets busy.

3. Build an Emergency Fund as a Core Part of Your Financial Resolutions

An emergency fund acts as your financial safety net. It is there to cover unexpected expenses, such as medical bills or urgent car repairs, without throwing other goals off track. Establish a savings goal that covers three to six months’ worth of your living expenses. Make sure these funds are kept in a separate account that you can access easily. Instead of using your long-term savings or credit cards, these emergency funds allow you to weather any storm without derailing your financial journey.

4. Consolidate and Manage Debt to Achieve Financial Freedom

One of the most powerful financial resolutions is to get rid of high-interest debt. Debt is a significant barrier to achieving financial goals, especially with the compounding interest that rapidly increases the outstanding balance. High-interest debt, such as credit card balances, can empty your resources and seriously limit your capabilities to save and invest. Start with documenting all your debts, including balances, interest rates, and down payments. Decide on a repayment method, which can either be the method of snowballing (where you pay off the smallest debts first) or the avalanche method (where you pay off the high-interest debts first). Consider consolidating your debts into a single loan with a lower interest rate if it’s feasible.

5. Review Your Insurance Coverage as Part of Your Financial Resolutions

Reviewing your insurance coverage is essential for ensuring financial security. Take time to assess whether your current policies, such as health, life, home, and auto, adequately protect you and your loved ones. Make sure your coverage aligns with your current needs and financial goals. Periodically revisiting your insurance ensures you are not overpaying or underinsured, keeping you prepared for any unexpected events.

6. Start or Diversify Your Investments to Meet Financial Goals

Starting or diversifying your investments is an important step in accomplishing your financial goals. If you’re a beginner, explore beginner friendly investment strategies to get started. But if you have been investing for years, checking out different investment opportunities, like stocks, bonds, and real estate can help you spread out risk and increase your chances for growth. Make sure to stay updated with your investment strategy regularly to see if it still matches your goals and comfort with your estimated risk. This way, you can steadily grow your wealth and set yourself up for a more secure future. 

7. Increase Your Financial Literacy 

Understanding how money works gives you the power to make smarter choices and take control of your future. Financial literacy is not just a skill, it is the key to feeling secure and confident about your decisions. Whether it is staying on top of tax tips, investment trends, or figuring out how current market events affect your finances, knowledge gives you a sense of control in a world that often feels unpredictable. This year, why not take a step to invest in yourself? Pick up a financial book, read a blog post or an article, join a webinar, or take a course. 

8. Embrace Patience to Build Wealth and Realize Your Financial Goals

It can be challenging to maintain financial patience in today’s world of quick fixes and instant results. But when it comes to building wealth, it’s true that slow and steady wins the race. This year, focus on increasing your wealth with consistent, intentional steps such as saving a percentage of your income, paying down debt, or investing in diversified funds. This strategy has the advantage of not calling for significant sacrifices. Trust the process, make smart decisions, and watch your financial freedom grow over time.

9. Plan for Big Moments in Advance

Planning for big moments in advance is essential to avoid unnecessary financial stress. When it comes to weddings, buying a home, or your child’s college education, having clear goals and starting to save early can make all the difference. Break your plans into manageable steps and create a dedicated fund for these milestones. You may enjoy these times to the fullest without worrying about the cost if you plan ahead. Planning well now creates the foundation for wonderful experiences later. Make sure to revisit your plan periodically to adjust for changing circumstances.

10. Schedule a Meeting with a Financial Advisor for Guidance

The best financial resolution you can make this year is to seek professional financial advice. Partnering with an expert will give you a fresh perspective on your financial journey and help you optimize your strategy. Whether you’re unsure about how to allocate investments, navigate tax planning, or set long-term savings goals, working with an advisor provides clarity and expertise. At nVest Advisors, we believe in empowering individuals with the knowledge and resources they need to achieve financial success.

Want more guidance to refine your financial resolutions for the new year? Schedule a call with one of our experts at nVest Advisors for personalized insights to align your goals with your aspirations. Remember, improving your financial health is a journey, and small, steady steps can lead to big results.