Analysis

3 Underrated Financial Resolutions That Could Change Your Life

It’s that time of year again — everyone’s talking about New Year’s resolutions, and I am clearly no exception. To find out more about the less-popular resolutions, I dug into The Ascent’s research about financial resolutions for 2024. What I learned surprised me.

Here are a few underrated resolutions that can have a major positive impact on your life and personal finances.

1. Saving an emergency fund

For my money, this is absolutely the best financial resolution, because it can give you so much peace of mind. I lived without an emergency fund for basically my entire adult life until very recently, and I can promise you that living paycheck to paycheck with little money for surprise bills is extremely stressful. The Ascent’s survey had just 8% of respondents note that this was their 2024 financial goal, however.

Saving an emergency fund is such a wonderful thing to do for your future self. Knowing you can handle an unplanned expense (like a big bill from the auto mechanic) can help you sleep better at night. And you’ll avoid going into debt and having your emergencies cost you even more once you’ve paid interest on them. As of August 2023, the Federal Reserve Bank of St. Louis found that the average APR on a credit card was 21.19%. Trust me, it’s no fun knowing you’ll be paying a similar figure on top of the cost of an unplanned bill.

To make it easier to build emergency savings, consider automating the process — that way, there’s no forgetting to save. And leaning on one of the best high-yield savings accounts can grow your money more quickly, thanks to higher interest rates.

2. Investing more

Only 8% of survey respondents named this goal as one they’re pursuing for 2024. I understand getting bogged down in the day-to-day tedium and expenses of life in general, but if you can carve out more money to invest for the future, it’s like building yourself a pair of wings so you can someday fly.

Thankfully, it’s a great time to be an investor, as you have access to so many free and low-cost tools to make it easier. You also have options for what kind of account you want to open — a taxable brokerage account will give you flexibility, but will not shield you from taxes either now or in the future.

If you’re comfortable investing over many years between now and retirement, opening an IRA account is likely a smarter bet. Go with a traditional IRA and you’ll save on taxes now — but opt for a Roth IRA if you’d like tax-free withdrawals in retirement. And if you have access to an employer-sponsored retirement account like a 401(k), it’s worth contributing to it — especially if you get a match on some of the money you put in it.

3. Building better financial habits

Yes, I know this one seems a bit vague, but stay with me. This was the financial goal named by 5% of survey respondents, and it could form a great foundation for a host of other money moves in 2024 and beyond. What does this look like? Well, you could dig into The Ascent’s personal finance coverage — we write about the stories and developments that hit you right in the wallet.

If you’re serious about getting better with money, another great move could be finding a financial advisor to meet with in the new year. They can go over your finances with a neutral eye and make recommendations for budgeting and debt payoff. If you need help deciding how to invest for the future, they can be a great resource there, too.

Even just taking the time to check up on your bank account and credit card balances a few times a week can do a world of good for your finances. Knowledge is power, and keeping tabs on your balances has never been easier thanks to mobile banking apps. Speaking of those apps, they also come with neat tools that can help you budget and save for goals, and you might even get access to your FICO® Score. Since this is the credit score used by 90% of lenders, knowing yours can help you decide which credit card to apply for and get approved — or notice when something is amiss and your score is lower than it should be.

As you can see, there are plenty of less-flashy goals you could target in the new year. They might not make your friends and loved ones say “wow,” but if you lean into them, they really could change your life for the better.

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