It’s New Years Eve fam, and before you pop open the bubbly and toast to another great year, it’s time to start thinking about the year ahead of us.
I hope you’ve had a great year– it’s been an awesome one over here at Millennial Money Man. I’ve got an excellent community of readers (I love you guys), an amazing team helping support this site, growing businesses, more travel, and the most incredible woman by my side.
Coral, I’m sorry for all the Christmas decoration shaming I’ve put you through this month.
Whether you’re into them or not, resolutions are a big part the New Year for many people.
Resolutions… or goals, as I prefer to call them… can help you take stock of what’s happened in the past and make you think about what you want from the coming year.
Don’t have a resolution in mind yet? Why not make 2019 the year you prioritize your finances and set a goal for your future financial well being?
Here are 10 simple New Year’s resolutions to help you take control of your finances:
Prioritize your debt
Millennials have an average of $42,000 of debt, and that isn’t just student loans– credit cards make up a significant amount of that total as well. Credit card debt comes with a hefty interest rate, and the longer you carry that debt, the more you are paying in the long run.
Student loans, credit card debt, mortgages, car loans, etc. are huge financial burdens and they add an enormous amount of stress to your life.
One of the best financial resolutions you can make is to do two things:
One, stop adding to your debt. Two, start destroying the debt you have.
Living debt free is one of the most liberating feelings you can have.
Read more at The Real Reason I Live Debt-Free
Spend less money
One of the basic principles of personal finance is that you should spend less than you make… always. This principle is unfortunately in conflict with society’s mantra of spend, spend, spend.
You need to get comfortable with watching others around you spending a crap ton of money on… well… crap. You’re going to see Facebook and Instagram posts of people on vacation, going out to eat, driving brand new debt mobiles, but that’s just noise.
You don’t have to live like that.
Actually, you shouldn’t live like that if you have debt, are unable to save for retirement, or are relying on credit cards to make those things a reality.
This is a hard one to tell you how to actually make happen. But, I guess the best way to approach this financial resolution is to stop and think for a second before you make every single purchase.
One of the biggest things that help me from spending more than I should is to think about how a purchase, even a little one, is going to prevent me from doing something awesome in the future.
Awesome meaning retirement, going on vacation, taking a leap with my business, that sort of thing.
Read more at Live on Less and You’ll Never be Stuck
Make a budget and track your spending
Budgets are thought of as lame and boring, but we’re millennials, so let’s rock that boat and make it our own. We could even make budgets the new avocado toast. Hey man, want to go out for brunch and talk budgets? Yes, yes I do.
Seriously though, a budget is a tool that helps you get ahead. It doesn’t have to be fancy or anything– a lot of millennials still use Excel budgets. If you want something a little more high tech, then there are a ton of financial planning tools on the internet.
My favorite money tracker, the one my wife and I use the most, is Personal Capital. It pulls your transactions for you, it shows all of your investments, tells you your net worth, and more. It has a clean and intuitive dashboard, and best of all– it’s free.
Get a better credit score
Unless you live in a yurt in the middle of the woods, foraging for and hunting your own food, and making all of your possessions, then you do need a credit score. It’s one of those financial institutions some of us may hate, but having a good credit score comes with some perks.
Credit scores run from 300-850, and you ideally want at least a 720. That number tells lenders, even future employers, how much they can trust you with money. A higher credit score will save you money as well.
The thing about credit scores is that they are weird, finicky beasts that jump up and down depending on the time of day… ok, not really, but it can sometimes feel like it.
To increase your credit score you can:
- Always make on-time payments.
- Keep old accounts open even after you’ve paid them off. This increases the age of your credit, which is a good thing.
- Make sure your credit utilization rate is under 30%. Since each bureau reports at different times, you can make more than one payment a month, which will help lower your utilization rate.
- Limit the number of hard inquiries, which come from applying for credit cards. Your score will rebound quickly, but think about when you’re applying for cards, especially if you’re about to do something like apply for a mortgage, consolidate your student loans, etc.
- Maybe open a credit card. This can be good if you do it well, like increasing your utilization rate and showing on-time payments, but if you can’t pay that full balance off every month, it’s going to cause more harm than good.
Start paying yourself first
I know way too many millennials who have the best intentions for saving money, but they wait until the end of the month and look at their account and say, “well, I spent too much and there’s nothing left to save.”
Your savings should have its own line in your budget. You should have a line in your budget for retirement savings, emergency savings, saving for vacation/car/down payment, etc. Then, every month, make that one of the first things you pay.
Grow your income
I’m not going to spend a lot of time on this one because there are so many ways to make a little extra cash if you are feeling stretched too thin to pay off your debt and save for the future.
Instead, here’s are a few of my favorite articles about making more money:
- 7 Weird (But Legal) Ways to Make Extra Money
- How to Make $1,000-$2,000 Extra Per Month Running Facebook Ads
- How to Make Money Online- A Real Guide for Millennials
- Best Sides Hustles for Teachers to Make Money During the School Year
Make work better
Hating your job, even disliking it more than you like it, is a really freaking awful feeling. I never loved my job as a teacher, and that feeling is part of what drove me to change my life. But, you don’t need to quit your job after making $3 online to make your work situation better.
Actually, don’t quit your job after making $3 online. It takes significantly more thought to leave the rat race for $3 than just a leap of faith.
I also know this doesn’t really sound like a financial resolution, but if you’re spending a lot of extra money to help you decompress after a stressful week, then you need to find a way to improve your work situation.
You can ask for a raise, apply for a promotion, find a job that suits you better. Even realizing what your job is allowing you to do can change your outlook and make work feel better.
Read more at Finding Legit Happiness in the Work You Already Do
I recently started on this goal, but I’m all in for 2019. If you’re following me on Instagram, then you know I’ve been making some killer low-cal tacos and lifting weights like a boss.
Improving your health can actually improve your finances. Being healthier means less in healthcare costs, and it just generally makes you feel better so that you have the energy to live a better life.
Make a long-term financial goal
When you are in the thick of it, it’s really freaking hard to see into the future and tell what your life is going to look like 10, 20, or 50 years down the road. Despite not having a crystal ball to see the future, you can start helping your future financial self by making a plan.
What do you want the next few decades to look like? Or, what do you want just the next year or two to look like? Start thinking about those questions and make a plan to get there.
This could be saving to buy your first home, making the leap to becoming self-employed, starting a family, or planning for retirement.
When you know what you want from the future, you can start building a foundation to make that future a reality.
I know a lot of my readers have been working hard to get their money right (many of you are probably already doing a number of the things on this list). But, once you get your money right and have more of it sitting around, you need to know what the heck to do with it all.
Letting that money sit in a savings account, with a savings rate of around 0.17%, won’t do much for retirement, but investing will.
I have a great guide for newbie investors to weed through everything out there, Investing 101 for Millennials: The Basics, but there are a ton of other options and explanations for why you should do one thing over another.
Just know that you need to start investing now. It’s working for your future self, and it’s something you won’t regret.