Resolutions for Your Wallet. Photo of credit card being put into a wallet.

Resolutions for Your Wallet

Every year, people around the world make financial New Year's resolutions in January and give up on them by Valentine's Day. Some of the most common financial resolutions are:

  1. Save more, spend less
  2. Pay down debt
  3. Increase income

Below are tips to help you accomplish those resolutions this year.  

Save More, Spend Less

The most critical step to achieving a balance between saving and spending is to develop a sustainable budget. A budget is your step-by-step plan for sticking to this resolution. There are two essential pieces of a successful budget: the money you make and the money you spend.

Break down all income and all expenses on a monthly basis to get a clear picture of what your personal budget should look like. This will help you optimize your spending and cut back on unnecessary expenses. 

Automating your savings is another tool you can use. Set up an automatic transfer from your checking account to your savings account that will take a portion of each paycheck and put it into your savings account. You will be less tempted to spend what you planned to save if you never see the money in your checking account. 

Pay Down Debt

If your resolution is to pay down debt, tackling all of it at once may seem like an insurmountable task. Try breaking it down into smaller goals, like monthly dollar amount targets, in order to make it more manageable.

For example, if you have $1,200 in credit card debt you want to pay off, commit to paying off the full balance of the card each month plus $100. At the end of the year, you'll be debt-free. Achieving the smaller monthly goals can help motivate you to reach the big one.

If you have a lot of debt you're trying to pay off, you may want to consider debt consolidation. Certain types of debts can be lumped together into a single account so that you can easily see how much you have left to pay off. Sometimes, you can even improve the interest rate you're paying on the loan. Talk to one of our lenders to find out if consolidation is a good option for your situation. 

Increase My Income

Resolving to make more money than last year is a popular goal, and more achievable than some people think. In addition to sitting down and asking your boss for a raise, it is important to consider additional sources of income that you may not be using. Do you have a hobby you could monetize? Painting, writing, and even helping people fix their computers are all valuable skills in the freelance market. If not, consider taking on a part-time position on the weekends to bring in some additional cash.

No matter what your financial goals for this year are, you can rely on Bank of Prairie du Sac to help you create a plan and find the tools to achieve them.

Learn more about meeting your personal finance goals at our Smart Money Classes. Classes are free and open to the public!