A new year often feels like a way to wipe the slate clean with new goals and ambitions, but do you find yourself struggling to narrow down what you should focus on? A great New Year’s resolution is taking control of your finances.  

How do you start?

1. Take a few hours to realistically and honestly evaluate your current financial situation. 

2. Identify two financial goals you want to achieve in the next 12 months and write them down (Save for a big purchase? Better spending habits?).

3. List the three to five changes you need to make to accomplish this. 

To help you achieve this, we’ve compiled a list of four simple financial resolutions, so you can start 2023 confident that you have the tools and resources to accomplish your financial goals.

1. Create and stick to a budget

Starting a budget doesn’t necessarily mean you have to completely change your life and budget for everything. Start by narrowing down the areas you want to focus on. Need to consider a grocery budget? Save for a vacation? 

Track your spending by listing your expenses and purchases. You may start to notice a pattern emerging, like buying too many new shoes or spending too much on eating out? Prioritizing where you can cut your spending will help you set realistic goals and stick to your budget. 

If you need additional help holding yourself accountable, consider using a budgeting app. Our online banking service offers easy access to ensure you can always track your expenses.

2. Build up your emergency fund 

Uneasy about today’s market? Starting or building an emergency savings account makes a great financial goal! We suggest first deciding the emergency savings amount you want. This will help you determine your savings timeline. All of 2023? Six months? There is no “rule” on how long you should save for, but having a timeline can help you determine how much you should pay into that account each month, to reach your goal on time.

While you are increasing your savings, consider decreasing your monthly spending in other areas. We suggest limiting credit card usage and not opening any new lines of credit.

3. Pay down debt 

Trying to get out of debt can feel impossible, especially if it’s debt in multiple places. Consider debt consolidation. While this means you’ll still be responsible for paying off the full amount, consolidation decreases the number of monthly payments you’ll need to make. 

If debt consolidation isn’t the answer for you, a great way to start shaving down debt is by paying more than the monthly minimum. 

There are also other methods you can consider before debt consolidation. The “snowball effect” involves paying off the smallest loan first and then rolling that payment into another bill once the first loan has been paid off, working your way up to the largest bill last. This method helps build momentum as each balance is paid off, and is a great way to give you a confidence boost in your debt journey because you’re able to track and physically see the progress you’re making each time you pay something off.

4. Reconsider a purchase you don’t need

This might be the hardest resolution we’ve suggested. Learning to say “no” to an unneeded purchase can feel overwhelming. We’ve all been there. When deciding to make a purchase, try these things first:

1. Take a step back and asses if you truly need it. Implement the 24 hour hold policy: don’t purchase it right then, and take 24 hours to think about if it’s a need or a want. This gives you time to weigh the pros and cons before purchasing and can help stop any potential buyer’s remorse.

2. Consider taking inventory of everything you currently do own. Refresh your closet or home décor. Move things around, style new items together. Consider donating things clogging up space that you don’t use. This can give you a sense of freshness without purchasing new items.

Our Takeaway:

We hope that these financial resolution suggestions help set you up for financial stability for 2023 and beyond. If you are looking for more tips on how to take better control of your finances, our Pinterest account offers themed boards where we provide insights on different financial subjects.

Give us a follow or visit us at IdahoFirstBank.com to learn more.