New Year Resolutions for Better Spending Habits

There’s never a wrong time to start implementing better money habits, but as we review the old year and look forward, now is a great time to get your financial house in order. Here are five financial resolutions you can make—and keep—this New Year.

Keep a money journal 

Keeping a written record of exactly where your money is going on a daily basis can be a great way to become more money-conscious. The idea is to honestly and diligently record every dime you spend, from mortgage and utilities payments right down to each cup of coffee, newspaper and pack of gum (it’s easy to overlook the little things, but they add up). At the end of each week and month, you’ll have a detailed account of exactly where your money has gone. It won’t take long to find places where you can scale back and be more mindful of unnecessary purchases. Find a format that’s convenient and easy for you to stick with (whether digital or pen-and-paper) and record each purchase as soon as possible. Consider noting other money thoughts as well, such as investment questions, goals, job/career ideas, or your values and beliefs about money.

Create, review (and stick to) a budget

In its simplest incarnation, a budget is a list of your household’s sources of income versus your household expenses. A successful balance of the two sides typically sees you left with extra money that you can use to achieve your long- and short-term financial goals. If you fall short, your options are a) earn more money, or b) spend less. How you break down discretionary spending (what’s left over after the bills are paid) is up to you and many people find it helpful to discuss their plan with a banker, financial planner or investment advisor. It is important to decide upon those long- and short-term financial goals ahead of time so you know what you’re working towards. Make a plan, review it regularly to keep yourself on track and you’ll be in better control of your financial picture in no time.

Curb unnecessary spending

This New Year’s resolution is where you can get really creative, but it may also put your willpower to the test. A good strategy is to discover and avoid your spending “triggers,” such as shopping on an empty stomach, surfing online shops at 1:00 a.m. or going out with friends for a bit of “retail therapy.” Another useful strategy might be to tape a note or picture onto your debit or credit card—or somewhere else you’ll see it regularly—to remind you what you’re saving for and boost your motivation. Check out a ton of simple, everyday ways to spend less here.

Review your bills

Instead of robotically paying bills each month, take a few extra minutes to go over each bill and statement line by line. You may be alerted to errors or charges you don’t understand and can contact the business or utility to dispute or ask for clarification. You’ll also be able to identify and cancel services that you no longer use or need, such as cable channels or subscriptions. Companies are often willing to work with you to reduce your monthly bill in a bid to keep you from heading to their competitors, so it never hurts to call periodically and renegotiate for a lower price or better deal.

Start planning for the future 

If you haven’t already, start thinking about retirement, no matter how old you are or how far off your golden years may seem. The earlier you start to put away even a little bit of money regularly, the more time you’re giving your dollars to grow. At the very least, don’t shy away from educating yourself on financial matters this year. Be open to reading personal finance articles, books and blogs or listening to financial podcasts to help you prepare for any financial issues that may arise.