With another new year, it’s time for another round of resolutions. You may have money on your mind again along with standard resolutions like “save more,” “spend less,” and “pay off debt” all on the to-do list for 2013.
While these are all good goals, they’re not very specific or exciting, decreasing the chances for success. Instead, crafting more thoughtful and specific goals for the year may pay off.
Before your New Year’s resolutions fall flat, here are six better options to consider.
1. Try something new to pay off debt
If you’re struggling with debt, you may have already tried to finagle your budget to pay down debt to no avail.
For the new year, try something new to knock down your balances. Can you:
- Reduce your debt interest rates? Credit card debt is expensive, but finding ways to refinance your balance can help you save. Consider a balance transfer to a 0% APR card, then make it a resolution to pay it all off before the interest-free term expires. Or check out peer-to-peer lending, a growing trend that’s helping more people borrow and repay debt at reasonable rates.
- Take a part-time job? You don’t have to work an extra 40 hours, but can you just earn another $100 a week? Applying that amount towards your debt can take a big chunk of the term of your loan and save on interest, too.
- Give up a car? Cars are really expensive; downgrading from two cars to one car in your household could be all you need to conquer debt.
2. Save a cushion of living expenses
Hopefully there’s only good news ahead for the new year. But just in case, make sure you have a comfortable cushion of living expenses if things do go bad.
At the bare minimum, having $1,000 in the bank for emergencies is a must. But ideally you want much more in the bank for when you desperately need it.
Depending on how stable your income is and how much risk you can tolerate, consider keeping three to six months or more of living expenses ready. Make sure this money is easy to access in the event that things take a turn for the worst.
3. Fully fund a retirement account
Having adequate money to retire with is the ultimate goal with the long-term in mind. With investments, you’ll need time for your money to grow, meaning there’s no more important time than now to get started.
Companies may match up to a certain amount of retirement contributions through 401(k) programs. But if you miss the window, you’ve lost out on free money that you can never regain.
IRAs work in a similar way, with limits to contributions each year.
For 2013, consider funding these accounts and taking advantage of the benefits your employer is offering or tax advantages from using these types of accounts.
4. Increase your credit score
You need to take care of your credit score at all times, especially if you’re planning to apply for a loan in 2013.
This step doesn’t need to be a lot of work, and if you’ve decided to take on related resolutions, you’re already moving in the right direction.
Look over the tips for improving your credit score. Maybe you can focus on paying down balances or dispute errors on your credit report. And no matter what, just say “no” to late payments in 2013.
5. Focus on big savings in 2013
It’s not that clipping coupons and skipping lattes aren’t effective, it’s just that these things either take a lot of time, only save a little money, or both. Maybe there’s time to look at those things later, but expenses that provide big savings with little work are a better place to start.
Think of expenses where you can save at least $100 over the course of 2013 with two or three hours worth of work. Some options include:
- Cable TV costs. No, you don’t have to get rid of cable, but you can often negotiate your cable bill and find better deals than your current one. Call up customer service and see if you’re eligible for any promotions. Search for deals and compare offers that other providers have.
- Cell phone plans. Are you overpaying for your current plan because you don’t use all your minutes or could find a cheaper plan on a different carrier? Don’t wait the two years for your contract to expire to evaluate your cell phone plan. Examine statements and cut out any services you don’t need. Consider a family plan where you can share minutes and save money.
- Insurance policies. It’s easy to stick with the same insurance provider. They just keep sending you the bills and you just keep paying. But there are savings out there. Ask for a few quotes from different companies and compare to your current plan to see if you can save.
6. Get your raise instead of waiting
There’s only so much you can do with a steady income, and there comes a time when earning more money must be a priority, too. Hopefully you’ve received a raise in the last year that at least covers the increased cost of living.
If not, can you find another way to get a raise? Asking for one and backing up your argument with the value your work provides is a good place to start.
If your current employer won’t up your pay, have you considered applying for a new position with a bigger salary?
Of course you can also pick up a little work on the side to earn a few extra bucks. Popular jobs for “moonlighting” include: freelancing, mystery shopping, or participating in focus groups.
No matter what your goals for the new year, make sure to keep them realistic and be sure to revisit them throughout the year to have the best chance at success.