happy new year

As we turn the clock to a new year and a new decade, this is a great time to use new year’s financial resolutions to create healthy financial goals. Since money is a means to an end, consider what your desired ends are: Do you want to buy a new car? A new home? Get your kids ready to go to college? Or do you simply want to put yourself on firmer financial footing by getting out of debt, and maybe investing for the first time?

Whatever your situation, it is always good to have a clear financial plan with a clear set of goals. With that in mind, we’ve put together this list of 20 financial resolutions that will help you set those goals, trim your spending, boost your savings and hopefully improve your financial and overall well-being.

How to Create Financial Goals

You should always have clear financial goals. Without them, you’ll bleed money and squander potential savings and opportunities. And, especially as you revisit your financial situation and look to improve your spending habits in the new year, you should make those adjustments relative to the goals that you set for yourself.

The best way to create financial goals for yourself is to clarify what you want, what you have, how you’ll get what you want, and then to track your progress. These five steps will help you create clear financial goals. 

  1. Define your wants and needs: Create a clear list of what you want and need to accomplish, and remember that your ‘wants’ are just as relevant as your ‘needs.’ Wanting to retire early or start your own business or buy a new home is just as relevant as needing to budget money to get out of debt or to save money for childcare or retirement. 
  2. Assess your situation: Establish your financial facts, laying out your income and assets against your debts, tax profile and other liabilities. Include your monthly spending in this by reviewing at least the last three months of bank and credit card statements.
  3. Create goal-based priorities: Be realistic, here. Planning for early retirement doesn’t make much sense if you have $30,000 in credit card debt and earn $50,000 a year. Your goals need to prioritize any remedial steps that will stabilize your financial situation if that’s your reality. But beyond that, you need to do the hard — and fun — work of determining priorities. Are you starting your emergency savings fund? Saving up for a boat? Putting money away for your kids’ college? Be realistic and prioritize those things that are the greatest need or pose the greatest immediate challenge.
  4. Define Your Plan: A lot of advice on financial planning includes SMART planning: Specific, Measurable, Achievable, Realistic, Time-Bound. If you’re saving for that boat, what size is it? How much do you have to put away each month to be able to afford it by next summer? Or the summer after? If the 30-footer you want would take a few years to get, maybe start with a smaller one you can save for adequately to get a little earlier.
  5. Create a Balanced Budget: A budget is your guiding blueprint for your short- and long-term financial goals. It pays for what you need and what you want each month and each year. It has to account for your savings plans, too, and you have to track your spending and ensure you really are putting away that savings each month, as you’ve planned.

New Year’s Financial Resolutions for 2020

1. Assess your situation

Reviewing your finances immediately after the high-spending holiday season can be a bit like surveying your home after hosting a party. And that’s why this is the best time to turn a sober eye to your balances, debts and then to consider your goals. Assess your financial situation and spending habits honestly and thoroughly. Ask yourself three basic questions:

  • How much money do I have saved or invested?
  • How much debt do I have?
  • How can I spend my money more efficiently?

Then, do the analysis: Are you in debt? If you are, is it a manageable amount of debt or one that induces anxiety and keeps you up at night? Or are you about breaking even or, better yet, saving adequately? Are there ways you can spend your money more wisely? Have this honest conversation with your partner, if applicable, to ensure you’re on the same page, and then you can begin to create a plan for moving forward.

2. Set financial goals

This part is both fun and challenging. It’s where you determine what you need and want to accomplish. You may want to get a new car, but if you have no emergency savings, that should probably take precedent. Clearly define what is most pressing and balance that against what you would most like to do, now and in the future. Start small and realistically plan for:

  • Reducing your debt: Create a plan for paying off your student loan debt or credit card debt or whatever debts you have, then keep that debt off by not taking on any new debts, which means… 
  • Living within your means: Your monthly budget should balance each month, and that balance should include all of your investments, savings or any funds you’re using to pay down debts.
  • Saving up for something: Start with an emergency savings fund, then a goal-based fund like a house fund, college funds for your kids, or a realistic vacation fund.

3. Create a monthly budget

To create a monthly budget, you need to know how you spend your money. Review your last three months of bank and credit card statements, and categorize every expenditure. Understand what you spend your money on, and find the places where you can cut back on spending. 

And, of course, there’s no better time to break old habits and to create new, healthier ones. Create a new budget that trims excess spending you find when you review your statements and that accounts for your goal-based savings plan.

4. Stick to your monthly budget

It’s one thing to create a budget when you’re making a list of new year’s financial resolutions, and quite another to actually live within it throughout the year. If you review your spending and find that you can save $200 a month by bringing your lunch to work four times a week, but then you keep ordering out every day, your budget doesn’t mean a whole lot. 

Likewise, if the new budget you create accounts for incremental deposits to your emergency savings fund every month, but you don’t set up those payments or you’re over budget in your other spending and you stop making those deposits, your budget is broken. Check your spending regularly, analyze it, and keep yourself honest. 

5. Track every dollar you spend

This is a key element to staying within your monthly budget, which in turn is the key to hitting your short- and long-term savings goals. Track and categorize every expenditure you make, every month, at least until you’re comfortable that you are consistently staying within your budget, and that your budget is allocated properly across spending categories. 

Because it’s easy, even once you’ve set your goals and understood how you spend money, to lose track and overlook those $6 stops at the coffee shop, those $14 lunches, and so on. Platforms like Quicken or Mint can help, and so can plain old spreadsheets. However you choose to track your spending, just be sure you do it.

6. Automate your savings

The easiest way to ensure you deposit regularly to your savings account is to set up automatic deposits from your checking account. You can even set up automatic savings from brokerage accounts or government bonds. 

And some banks offer you the opportunity to round up every debit card expenditure to the nearest dollar, depositing the difference into savings. Depending on how often you use your debit card those savings may add up to hundreds or thousands of dollars over a year.

7. Create an emergency savings fund

The obvious benefit of having an emergency fund is that it’s there to support you if the worst happens — you lose your job, you’re hit with a medical emergency, etc. The rule of thumb is to save a minimum of three months’ worth of your total expenses. That’s everything you spend money on each month: Car payments; rent/mortgage payments; groceries; 401K contributions; child care; utility bills — every single thing. 

Having an emergency fund is a bedrock of personal financial planning, and it’s an especially good idea right now, as many financial experts speculate an economic recession likely to hit in 2020. But beyond being prepared for the worst, having an emergency fund can give you the confidence and comfort to take calculated risks, like starting your own company. 

It can also ease your anxiety when you listen to those rumblings about a recession or see those volatile days on the stock market that may temporarily hurt your investments. And if there’s anything more valuable than a good nights’ sleep, please let us know.

8. Create a goal-based savings fund

At the core of your finances should be a goal or a set of goals. What do you want to use your money to accomplish? What can your money do to bring you joy or comfort or security? Maybe it’s starting that emergency savings fund, or maybe it’s buying a new home. 

Ideally, once you’ve got your emergency fund secured, you can create a goal that is aspirational or even a little indulgent. Whatever you want to achieve, creating a savings fund designated specifically for that goal — and making contributions to it a part of your monthly budget — will help make that goal a reality, and will also add some fun to your finances. 

9. Pay off your debt

Nobody wants to be in debt, but it happens. Whether through need, neglect, or calculation, Americans have racked up $13.86 million in debt between mortgages, car loans, credit cards and car loans. Over 189 million Americans have credit cards, and the average household that has a credit card has over $8,000 in credit card debt. 

So, any financial plan has to prioritize getting out of debt. You can even create formal debt repayment plans with lenders including the IRS for back taxes, the federal government for federal student loan debt, and with credit agencies for credit card debt. In general, it’s best to pay off the balances with the highest interest rates first, since that will save you the most money over time. And, of course, if you’re working hard to pay off your old debt, be sure not to add any new debt.

10. Pay your balances every month

Once you’ve paid off your debts, keep them off. Pay off everything you put on your credit cards every month — if you don’t, you’re not living within a balanced budget, and the surest way to rack up additional credit card debt is to pay high APR fees to lenders. 

This can be hard to do if you’re used to the cushion of not paying off those monthly balances, but creating a truly balanced budget means that each month you’re not spending more than you take in, and that includes your credit cards. You’ll be a lot better off once you start to think of your credit cards as tools that give you rewards for spending the money that you have, instead of ways to spend money that you don’t.

>>Find the Credit Card That Fits Your Spending Habits

11. Ensure your insurance

It’s always a good idea to revisit your insurance coverages to see if you can make your policies more efficient. If you have a good history as a driver, consider lowering your monthly premiums by lowering your coverages — but not so low that a minor accident will cost you. 

If you have life insurance, a term policy has lower premiums while still providing for your beneficiaries within the timeframe of the policy. If you are rarely sick, you can consider switching your health insurance during open enrollment to a high-deductible plan with lower premiums. If you do this, though, it’s a very smart idea to have an ample emergency savings fund. 

12. Take advantage of your spending

Spending wisely doesn’t mean not spending at all; the reality is that you’re still going to spend money. So, choose a credit card that rewards you based on how you spend your money. Do you eat out often (within your new monthly budget, of course)? Or, do you shop at a certain store often? Buy a lot of gas for a long commute? 

Whatever your spending habits and priorities, there are credit cards that will give you rewards — cash-back or redeemable points — weighted to those categories. Are you a pretty even spender across categories? There are several simple cash-back rewards cards that reward evenly — and generously — across all spending categories. Bottom line? If you’re not using a credit card suited to how you spend money, you’re leaving cash and valuable rewards on the table.

>>Find the Credit Card That Fits Your Spending Habits

13. Improve your credit score

There is no quick fix to improving your credit score, and there are many interwoven factors that determine your score. But there are a few steps you can take to see your credit improve in the short- and mid-term:

  • Pay your bills on time: The most important factor in your credit score is your ability to pay your bills on time. Late payments will badly hurt your credit score. If that’s been an issue for you, begin today by always paying at least the minimum payment due each month.
  • Pay down your debt: This is easier said than done, of course, but paying down your debt lowers your utilization ratio, which is important. It also has the added benefit of lowering the interest payments applied to your accounts each month.
  • Apply for a credit increase: You should only do this if you understand that doing so will require a hard credit check, which will have a small negative impact on your credit score. But if you have a decent credit score already, then the benefit of adding additional credit and lowering your utilization ratio could outweigh that consequence.

>>Read CardCruncher’s complete guide to improving your credit score 

14. Get a side hustle

A side hustle can be a great way to diversify your income, yes, but it can also be a great way to build new skills and even branch into a new career. You can find a side hustle by understanding what skills you have, and then marketing them to folks who could use you. If you’re a good writer, you can freelance write outside of your day job, for instance. 

Or, if you have the time and find the right situation, maybe you can find a part-time position or freelance work that lets you learn a new skill set that can take your career in a new direction. One of the great things about the internet is that it’s easier than ever to find ways to make money outside of your day job, and having extra cash flow is always a good thing.

15. Get smart about finance

Of course, it’s hard to confidently take charge of your finances if you don’t feel comfortable doing it. Even if you have a good handle on the basics, it never hurts to challenge what you think you know, or to learn more about the things you don’t. Whether it’s the basics of personal finance or the nuances of managing a balanced stock portfolio, always be learning. 

Talk to friends and acquaintances who know more than you do, whether that’s your accountant or your uncle who’s done an amazing job saving. And read. Books like Benjamin Graham’s seminal “The Intelligent Investor” and Burton G. Malkiel’s “A Random Walk Down Wall Street” are great places to start.

16. Invest

The surest way to significantly grow your money is to invest in the stock market. And that’s where we offer the huge caveat that doing so comes with great risk. Before you sign up for an online brokerage account and bet all your money on black, make sure you’ve got Tip no. 14 above down. 

Consult a professional If you’re new to investing — and even if you’re not — it’s probably a good idea to sit down with a broker or a consultant, walk them through your finances and your goals, and at the bare minimum, get their advice for how to invest your money. There’s a reason these people are trained investment professionals and you are not, so take advantage of their expertise and, at a bare minimum, mitigate your risk in doing so.

17. Boost your retirement savings

If you don’t have an employer-sponsored 401K retirement savings account, and if you don’t have any personal retirement account opened yet, change that. Decide if a Roth or a traditional IRA is right for you, open one, and then set up automatic deposits, if you can.

Already have one of these accounts? Evaluate to see if you can increase your regular contributions. Have a 401K? Check to see if you can afford to increase your contributions within the max personal contribution level of $19,500 for 2020 (if you’re over 55, you can contribute an additional $6,500 for 2020. If your employer contributes to your 401K, check to see if their contribution levels are changing or remaining flat. Either way, if their contribution levels are tied to yours, it’s always good to contribute the most you can, so that they do, too.

18. Make a will

Similar to the above, remember that life is short. Terrible things happen from time to time. And, especially if you have kids, you need to be prepared if something tragic happens to yourself or your spouse. Find an estate planner. Sit down, plan it out. 

You may be relatively young in your adult life, and it may seem silly to plan the allocation of what you think are meager financial windfalls right now, but even if the worst happened tomorrow, those funds have to go somewhere. And if it happens 10 years from now after your assets have matured, those considerable funds will have to be accounted for. 

Yes, the odds are that you’ll be here tomorrow and the next day, but, especially if you have kids, you need a plan in place in case you’re not. 

19. Take care of yourself

The trifecta of a full, sustainable life is your friends and family, your work, and your health. The latter won’t just make you feel good, it will show up in your wallet. 

Take care of yourself — eat well, exercise, indulge in all things in moderation, and get routine physicals — and you are more likely not just to live longer, but to have fewer medical expenses along the way. 

Chronic, preventable diseases cost the American economy billions each year in healthcare costs and lost productivity — impacts that manifest at the individual level through heart disease, obesity, diabetes, cancer, and other conditions that can be treated through healthy lifestyle changes or regular screenings that detect illnesses early, when they are most treatable. 

Take care of yourself and you’re likely not just to live longer and feel better physically, but also to avoid financial hardship down the road.

20. Fix your career

None of these changes, and no amount of financial stability, mean anything if you’re unhappy in life. And one of the easiest ways to be unhappy in life is to be dispassionate or downright disconsolate about your career. That unhappiness will creep into every facet of your life. 

On every day before your last, you can make a change. Yes, you may not have the skills or the recent experience to get your dream job today. But you can always look for a job that gets you closer to that dream job, and if you need to go to school to get the skills, that can be the goal-based savings plan that you build. 

Without being cliche, let us remind you that you’ve got just this one life. And a huge chunk of that life will be spent at a job, so do everything in your power to make it a job that inspires you and fills you with a sense of purpose.


There is never a bad time to take meaningful steps to improve your financial outlook. And turning the page on your finances with this set of new year’s financial resolutions can be a good way to get a fresh start, to build something new and to make your financial future more secure.