Last year was, well, rough with a pandemic, job losses, civil unrest and more. It’s no surprise that as we moved into 2021, nearly 40% of Americans expected they’d be in “survival mode” by 2021, according to the Fidelity Investments’ 2021 New Year Financial Resolutions Study.
More than two-thirds of Americans faced financial setbacks in 2020, according to the survey, including job losses, emergency expenses and the need to provide financial help to family and friends who were struggling.
But the good news is this: Americans remain ever optimistic. The survey also found that they are confident that they’ll be in a better financial position this year.
But boosting your financial health takes some extra effort beyond earning more money or cutting back on expenses. If you’re looking for some new year’s financial resolutions, we’ve got several that you can get started on right away!
Here are six New Year’s financial resolutions that you can stick with
Contribute to your 401(k)
If your employer offers a 401(k)-matching program, sign up and start contributing what you can afford. With these programs, your employer will match your contribution to your retirement plan up to a certain amount — usually between 3% and 6%. So, if your employer matches 4% and you contribute 4% of your earnings, your employer will contribute that very same amount to your account. If you don’t, they keep that money for themselves. If you’re already contributing, considering increasing how much you already are socking away.
Review credit report
Your credit report spells out all kinds of information — from how well you pay your bills to your current debt load. With the information, credit bureaus tally up your credit score, which can range between 300 and 850.
Lenders use the number to determine if a person is worthy of a loan. Property managers and employers consider it as they are evaluating potential tenants or employees. A good credit score, which hovers between 670 and 739, means you may get a better deal on a loan or be more likely to get that apartment or job you really want.
But credit reporting companies can make errors, which could potentially damage your score. And sometimes fraudsters, without your knowledge, open a credit card account in another person’s name.
That’s why it is critical that you check on your credit reports each year to ensure the information is correct. You can get free annual reports from Equifax, Experian and TransUnion via AnnualCreditReport.com to ensure all the correct information is there.
Divert part of paycheck to savings
Assuming you’re able to cover your living expenses and bills, diverting a portion of your paycheck to a savings account is a great way to squirrel away some extra cash for when you need it. Even just $20 a paycheck can add up over time and make a big difference if you run into an unexpected expense.
If your employer allows you to direct deposit your paycheck, it’s likely that you’ll be able to send part of your earnings to a checking account and another portion to a savings account. Once your money is out of sight, out of mind, tucked away in your savings account, you’re more likely to save more money.
Look for places to trim
These days, it’s easier than ever for your expenses to add up without even knowing it. Online shopping has grown during the pandemic, for example, as people avoid going into stores. But it’s also easy to buy something on impulse when all you need to do is tap your phone a couple of times from the comfort of your couch. Now is a good time to look at your online spending habits to see if there are ways to cut back. At the same time, it’s a great time to find out if you can lower banking fees, your cable bill and other monthly expenses. Sometimes all you need to do is ask.
Consider big needs
Look ahead to 2021. Are there any big needs? Is your vehicle on the fritz? Are you expecting a child? Or will your teen be headed to college? Is it almost time to replace the refrigerator or washing machine? Now is the time to start making plans for those big purchases and needs for 2021 and setting aside money so you can afford them.
Look for support
It was a difficult year, and many people are struggling. If you feel like you’re running out of options, find out if you can lean on friends and family. Also look to community organizations that can help. United Way’s 211 program helps to connect people in need with groups across the country that provide housing, food and other assistance. So many people are hurting right now during these unprecedented times. There’s no shame in asking for help.
The team at CESI is committed to helping you make wise New Year’s financial resolutions and to helping you understand how to get out, and stay out of debt. For a free debt analysis, contact us and find out how we can help.
