Top 10 Financial New Year’s Resolutions for 2024

Many of us make New Year’s resolutions to successfully kick off the brand new year. Common goals include revamping your gym routine, saving money, or improving your diet. While this article may not help you go to the gym or alter your diet…it will help you save money and spend smarter this year.

We don’t always stick to our resolutions, but with a little planning, you can keep your financial goals on target and start saving money in the new year.

Watch our video for more from our experts.

Here are our top 10 financial New Year’s resolutions that will get your new year off to a strong financial start.

1. Develop a Monthly Schedule

The first personal finance resolution you should have this year is to develop a monthly schedule to maximize credit card rewards. For this step, it is important to understand the available consumer credit types.

Certain well-known credit cards offer rewards that normally change every quarter. So, if you have multiple credit cards, activate them all and keep track of the cards that provide a reward using a spreadsheet or other monitoring system.

Keeping track of this in one place can be easier with a clear spending strategy.

Another advantage of regularly tracking your credit cards is that it can help you spot credit card theft and faulty charges.

If you share your finances with a partner, ensure you both have access to the spending plan to maximize its advantages and effectiveness even more.

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2. Improve Your Credit Score

The next suggested financial resolution is improving your credit score. A good credit score can help you qualify for better rates on loans and credit cards. And that’s not all — a good credit score can also mean lower insurance premiums.

For example, here’s how your credit score may affect your car insurance rates:

Average Monthly Full Coverage Auto Insurance Rates by Credit History

Your credit score is one of many variables insurance companies use to calculate your car insurance rates. This is justified by the idea that a person’s credit score indicates financial stability and accountability. Higher credit scores are generally associated with greater responsibility and a decreased tendency to file claims.

Insurance companies often charge individuals with higher credit scores lower insurance rates because they are more likely to pay their bills on time, stay out of debt, and have a lower chance of declaring bankruptcy.

If you’ve ever filed for bankruptcy, it may take some time, but eventually, you may be able to remove a bankruptcy from your credit report.

So always review your credit report and take steps to improve your score. This can be done in many ways, including paying your bills on time, reducing your credit card debts, avoiding opening new lines of credit, and disputing errors on your report.

3. Make Your Money Work For You

Making your money work for you is the third resolution for your list. If you can’t or don’t want to invest right now, that’s fine. Maybe you are concerned about investing in a company without owning equity or providing a loan.

However, this does not imply that your money should be left to gather dust in a low-to-no-interest checking account. High-interest savings accounts can significantly affect how much money you can save over time.

The default savings account you received when you opened your first checking account in high school isn’t doing you any favors. It’s crucial to recognize that not all savings accounts are created equal. And here comes the miracle of compounding.

Think of compound interest as the icing on top of the high-interest-account cupcake. Your money can grow exponentially over time with compound interest.

Instead of earning interest only on the initial amount of money you invest, compound interest allows you to earn interest on both the initial amount and the interest accumulated over time.

Here’s an example to help explain how compound interest works:

• Imagine investing $1,000 in a savings account with a 5% annual interest rate. After the first year, you would earn $50 in interest ($1,000 x 0.05 = $50).
• If you leave that interest in the account and don’t withdraw it, the following year, you would earn interest on the original $1,000 and the $50 interest you earned in the first year.
• Now, your $1,000 has grown to $1,050, and you would earn $52.5 in interest in the second year ($1,050 x 0.05 = $52.5).

This process continues every year, and over time, the interest you earn on the interest you’ve already earned causes your money to grow at an increasingly faster rate.

4. Examine Your Insurance Policies

The fourth financial New Year’s resolution suggestion is to examine your insurance at least each quarter. Make sure you have at least the minimum required insurance coverage. You need to be confident that you will be protected from fines and steep out-of-pocket fees in the event of an accident.

You can check with your DMV to determine how much car insurance coverage you need to meet your state’s minimum insurance requirements.

Once you know you have the right coverage (and enough coverage), ensure you aren’t spending too much on your insurance. Shop around, compare providers, and get a few quotes online.

FreeAdvice.com has a tool to provide insurance quotes from multiple insurance companies near you — just enter your ZIP code and answer a few questions. Then you can see a range of prices and know if you need to find a more affordable provider.

Do you qualify for Medicare? Be sure to compare prices during open enrollment. Get the help you need from experts at FreeAdvice.com to ensure you receive the coverage you need at the best price.

Once you find the best provider and policy, check up on your insurance coverage every 2-3 months.

Confirm you’re still getting the best deal and coverage for your needs. You should compare at least three insurance providers when you shop for a new policy or company. Also, an important tip: to avoid coverage gaps, always wait until your new policy has started before canceling your old one.

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5. Evaluate Your Debts

Consider reevaluating your debts is the fifth resolution you should have this year. Be sure to check that your repayment strategy still supports your goals.

This can entail coming up with a strategy to pay off your debt more quickly or looking into refinancing possibilities. You can browse and discover that refinancing at a cheaper interest rate could ultimately save you a few thousand dollars.

Remember that when you refinance a loan, the previous one ends, and a new one is created. For example, if your student loan was the oldest credit on your credit record, this could have a short-term negative impact on your credit score when you applied for new credit.

Another thing to keep in mind for those with student loans is that there have been many changes in requirements recently.

Be sure to see your payback requirements and start with your highest-interest loans. Make sure the money you pay back each month goes to the debts that must be paid off first. Having a solid payback plan is essential to your financial success.

6. Consolidate Your Debt

The sixth new year’s resolution you should have is to consolidate your debt to obtain a lower interest rate. Many people desire to start the new year by paying off their credit card debt.

Debt consolidation combines a number of debts — mostly high-interest debt like credit card bills — into a single payment.

If you can acquire a reduced interest rate, this is an excellent alternative to take into account, as it will help you plan your spending and help you pay off your debt more quickly.

7. Pay Off Debt

Paying off debt comes in at resolution number seven for your list. Credit card and student loan debt were briefly discussed earlier, but in general, developing and implementing a debt repayment plan should be your top financial goal.

So consolidation was stated earlier, but there are additional strategies as well.

The debt snowball and avalanche are two of the most well-known debt repayment strategies.

The snowball strategy requires you to pay off the smallest debt first, and by creating positive momentum, it might inspire you to keep going.

With avalanche, you pay off the loan with the highest interest rate first, reducing the amount of interest that accrues over time and enabling you to owe less. It’s important to pay the least amount owed on all your obligations for both tactics, so choosing where to put the balance is merely a matter of preference.

Never forget the importance of planning. Having a financial plan will assist you in creating a budget and accelerating your debt repayment.

And which approach you think is appropriate for you will depend on your objectives and financial conditions.

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8. Learn More About Personal Finance

Another financial resolution you should commit to this year is to learn more about personal finance. Take the time to learn personal finance tips by reading books, listening to podcasts, or taking a class.

The more you know about personal finance, the better equipped you’ll be to make smart financial decisions and wise investments for the rest of your life.

9. Evaluate Subscriptions and Memberships

Resolution number nine is to evaluate your subscriptions and memberships. Take a look at the current subscriptions and memberships and see which ones you are using and which ones you can cancel or put on hold. Maybe it’s time to cancel that NetFlix or HBO membership and exchange it for a gym membership. The best gym management software makes it easy for you to sign up at your local gym and begin a new healthy habit for the New Year, but don’t just add yet another expense to your month without also taking a hard look at your existing subscriptions and memberships. Now, just make sure you commit to actually attending the gym throughout the year, because signing up for a gym membership and not going could end up adding yet another membership or subscription you will be paying for and not using!

That way, you are becoming intentional with your spending by making choices that align with your values and goals and saving money in the long run.

10. Create a Budget and Stick to It

And that brings us to the tenth financial resolution to kick off your year: stick to your budget. Budgeting is still one of the most important steps in building financial stability. But no amount of budgeting will do any good if you don’t follow it.

Sticking to the budget you set (and readjusting as needed) is the key to making a solid budget work.

Again, make adjustments as necessary, but try to stay within your allocated spending plan. Before you start, make sure you do the following:

• Find out what your net income is
• Know what your fixed expenses are
• Determine your varied expenses
• Compare your income and expenses
• Regularly evaluate the budget

Regardless of its significance, many people in the world of budgeting need to pay attention to this last step. You can’t just create a budget, forget about it, and hope it will work for you. You’ll need to review and update it periodically.

If your finances, spending, or other situations change, your budget will need to change too.

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How to Put Your Financial Resolutions Into Practice

Now that the spending season is over, it’s a perfect opportunity to consider what you did well in the previous year and what you could do better when it comes to spending and budgeting this year.

These ten financial new year resolutions will help you kick the new year off right. You can use this list to develop a plan for the year.

Even if you only pick one or two of the suggested financial resolutions, they can still positively impact your financial situation and make a difference for you this year and for years to come.

Get SMART About Your Financial Goals

How do you envision your finances will be in five years? What changes do you need to make? What do you envision for your family? Set some goals and then work hard to achieve them.

We suggest you use the SMART template when creating your financial goals and developing your New Year financial planning checklist.

Keep that SMART strategy in mind as you set your new years resolutions. What are you waiting for? It’s time to make this your best year yet.

Case Studies: Achieving Financial Success Through New Year’s Resolutions

Case Study 1: Maximizing Credit Card Rewards for Travel Enthusiasts

John and Sarah are avid travelers who want to make the most out of their credit card rewards. They develop a monthly schedule to track their credit cards and activate rewards for different categories each quarter. By strategically utilizing their credit cards, they accumulate travel points and cashback rewards, allowing them to enjoy discounted flights, hotel stays, and other travel-related expenses.

Case Study 2: Boosting Credit Score for Lower Insurance Premiums

Emma is determined to improve her credit score to secure better insurance rates. She diligently pays her bills on time, reduces her credit card debts, and disputes any errors on her credit report. As her credit score rises, she begins receiving lower insurance premiums, ultimately saving hundreds of dollars per year on her auto and home insurance policies.

Case Study 3: Making Money Work for Long-Term Savings

Mark wants his money to work for him and generate long-term savings. He moves his funds from a low-interest checking account to a high-interest savings account that offers compound interest. Over time, his savings grow exponentially, allowing him to achieve his financial goals faster, whether it’s buying a house, starting a business, or saving for retirement.

Case Study 4: Optimizing Insurance Coverage and Costs for New Parents

Sarah and Mike recently became parents and want to ensure they have the right insurance coverage for their growing family. They review their auto, home, and life insurance policies to make sure they have adequate protection. By comparing quotes from multiple insurance providers, they find a more affordable policy without compromising coverage, giving them peace of mind as they navigate the joys and challenges of parenthood.

Case Study 5: Debt Consolidation for Financial Freedom

Lisa is determined to pay off her high-interest credit card debt and regain financial freedom. She consolidates her debts into a single payment with a lower interest rate through a personal loan. With a structured repayment plan and reduced interest, Lisa can make consistent progress in paying off her debts and feels a sense of relief as her financial burden becomes more manageable.

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