The beginning of the new year is an exciting time for many. The New Year is a great time to reset, reflect and set goals for ourselves. If you’d like your 2023 New Year’s resolutions list to include anything in the financial arena, we’re here to help provide you with some ideas for goals, as well as some helpful tips for accomplishing those financial resolutions.
According to a WalletHub poll on the top resolutions for the new year, 1 in 3 Americans are planning to make finance-related New Year’s resolutions.
Below, we’re sharing some of the most popular financial New Year’s resolution goals and providing insight on how to achieve them.
1. Improve Your Credit Score
Having a good credit score is important for many reasons such as receiving lower interest rates, gaining access to more favorable loans, and being approved for higher credit. If your credit score is less than ideal, a good financial goal for 2023 could be making it a priority to improve your credit score. There are several ways to improve your credit score, like paying your bills in full and on time, cutting back spending, restricting the number of new accounts you open, setting up automatic payments, and much more.
2. Pay off a Credit Card
According to Experian, about 95% of Americans have a credit card and cardholders carried an average balance of $5,221. Therefore, if you feel like you’re struggling with credit card debt, know that you are not alone. Given this eye-opening stat, it’s no surprise that so many people set a goal to pay off credit card debt in the new year.
There are a few different strategies you can use to pay off credit card debt such as targeting one debt at a time, focusing on higher-interest debt, consolidating debt, or considering a balance transfer credit card.
3. Pay my Full Credit Card Balance Each Month
Paying your balance on time and in full every month is a great goal to set, as payment history is one of the most important factors of your credit score. Paying your balance in full each month not only reduces interest charges or fees that may occur from carrying debt from month to month, but it also helps improve your credit by reducing your utilization rate (credit used vs credit available).
If you’re not able to pay your credit card in full each month, you should at least make your required minimum payment on time to avoid late fees and penalty interest rates.
4. Create a Personal Budget
For many people, a budget can feel overwhelming and even restricting, but tracking your spending can significantly help you understand where your money goes each month.
A well-defined budget helps set guidelines for what you can afford to spend and identifies areas you could cut back. To create a personal budget, start by noting all of your fixed expenses (mortgage, cell phone bills, student loans, groceries, etc.). Doing this allows you to see how much money you have left over to be used for flexible expenses (dining out, shopping, vacations, etc.).
An easy way to see all of your purchases in one place is through your credit card statements. Credit cards can be useful for budgeting, as they often let you check your spending by category, which is extremely helpful when setting up your budget for the new year.
5. Be More Conscious of Credit Scores
Improving your credit score works in tandem with being more conscious of your credit score. This can be done by checking your credit score and report more often or signing up for a credit monitoring service.
These tools can send you an updated score every month, as well as factors that may have influenced your score. Regularly checking your credit report is important to ensure you can spot fraud early. Credit monitoring tools can alert you of possible fraud and monitor for any suspicious activity.
Start Working Towards Your New Year’s Resolutions
While setting New Year’s resolutions can be intimidating, especially if they’re financially related, it’s important to keep yourself accountable by setting goals for yourself. If you’re feeling overwhelmed and would like to feel empowered on your financial journey, reach out to Voyage FCU for guidance.