How to keep your New Year's financial resolutions, according to an expert - Fox Business
January is the perfect time to reflect on your money habits in the past year and find ways to improve your spending behavior, so you can have peace of mind about your financial plan. ( iStock )
The new year is a clean slate following the indulgence of the holiday season. It's easy to lose sight of your goals in the holiday spirit — whether by eating that extra slice of pecan pie, drinking one too many glasses of egg nog or spending too much money on the perfect gift.
While the dieting and exercise advice is best left to a fitness trainer, Bank of America spokesperson Mary Hines Droesch has a few tips for consumers who want to improve their spending habits in 2022. A new BofA survey of more than 2,000 Americans found that consumers have set some ambitious financial New Year's resolutions:
- Increase savings (40%)
- Build an emergency fund (26%)
- Pay off credit cards (26%)
- Travel or vacation (24%)
- Build retirement contributions (23%)
- Purchase a new car (19%)
- Buy a home (15%)
- Save for college costs (12%)
- Pay off student loans (9%)
Keep reading for expert tips on how to achieve your financial goals in the new year. Whether your 2022 financial resolution is to buy a home, get rid of credit card debt or pay off your student loans, visit Credible to explore a wide range of financial products. You can compare interest rates on mortgages, student loan refinancing and debt consolidation loans all in one online marketplace.
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Share your financial resolutions with a friend
Personal finance can sometimes feel too personal to discuss, even among loved ones. But when you're open about your financial goals, such as spending less and saving more, there's an added level of accountability.
"Communicating openly about finances with someone you trust can help keep you accountable to your goals," Droesch said. "Whether you and a co-worker agree to pack a lunch rather than eat out, or you and a friend commit to Friday night activities under a certain dollar amount, it’s easier to stay motivated when you have a partner cheering you on."
If your goal is to boost your savings in 2022, consider opening a high-yield savings account to watch your money grow over time with interest. As an added bonus, set up automatic contributions via Direct Deposit straight from your paycheck. That way, you don't have to worry about meeting your savings goals.
Visit Credible to compare high-yield savings account offers for free without impacting your credit score.
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Build budgeting into your self-care routine
During the coronavirus pandemic, many people had more time for introspection and prioritized caring for their own mental and physical wellness. Consumers should view their finances in the same way, as a part of their overall wellbeing.
"Financial health is often an overlooked part of personal wellness, but budgeting is a self-care routine like any other."- Mary Hines Droesch, Bank of America spokesperson
Budgeting may not seem as enjoyable as meditating in a hot bath or treating yourself to some much-needed downtime, but it doesn't have to be a dreadful task. There are plenty of free budget apps available on your smartphone that can automatically track your spending, which makes budgeting as easy as checking social media.
"Regularly tending to your budget, especially as your priorities change, can help address anxiety and set you up for long-term success," Droesch said.
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Regularly monitor your credit score
Having a good credit score can help you achieve your other financial goals, so it's important to keep an eye on your credit history as an indicator of your financial wellbeing. You can request your free credit report from all three credit bureaus — Equifax, Experian and TransUnion.
You can also enroll in free credit monitoring services on Credible.
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"Credit scores are important because they affect many areas of your life like signing a lease or buying a car," Droesch said. "Commit to healthy habits including paying off your balance on-time and in full."
Although 60% of Americans are paying their bills on-time and in full, 1 in 4 still resolved to paying off credit card debt, according to the survey. If you've made it a goal to get rid of revolving credit in 2022, consider using a debt consolidation loan. This debt repayment strategy allows you to pay off debt quickly, at a lower interest rate and in a predictable payment plan.
See your free debt consolidation loan offers on Credible, and use a personal loan calculator to estimate your monthly payments.
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