Money Smarts Blog

New Year's Resolutions to Fix your Finances

Dec 20, 2021 || IHMVCU

Woman starting to write her 2022 goals on a pad of paper

The new year is right around the corner, which means those pesky resolutions are too. While a lot of us are out here trying to fit into our skinny jeans from high school and drop some bad habits (smoking, soda, nail-biting, $6 coffees, what have you), your resolutions shouldn’t be limited to your physical self.

Whether you’re a goal-setter or not, this symbolic clean slate of another year ending is a great opportunity to set some goals to improve your financial self.

Regardless of where you are on your financial journey, here are some simple ways you can start the next year on your best financial foot.

  1. Create a budget you can stick to
    If you’re the kind of person who can blow $400 in two hours and then make $3.78 last you the next two weeks until payday, you’re a prime candidate for a budget (congratulations!).

    You’ve probably told yourself you need to budget plenty of times. But it turns out analyzing your spending is boring so you watched Squid Games instead. We’ve all been there.

    Here’s the thing though: yes, it’s boring, but it’s worth it. Having a flexible budget that can be adjusted based on your goals makes breaking the paycheck-to-paycheck cycle and buying that new iPhone a lot easier.

    There are a lot of different budgeting methods out there, and the best way to start is to familiarize yourself with your options. We broke down some of the most effective budget methods in this blog so you don’t have to: 5 ways to budget your money. All you have to do is pick one and get started.

  2. Add 10 points to your credit score
    Yes, just a measly 10 points. Depending on what your credit score is, 10 points might be a pretty lofty goal. Improving your credit score at all takes some restraint and dedication, so start small.

    Before you do anything else, though, now is the perfect time to head over to and give your credit report a once-over. If everything looks right, you can put that bad boy away for another year.

    If you notice anything suspicious – like a line of credit you don’t remember opening or a creditor reporting missed payments you know you made, you can file a dispute.

    Then, start paying down your debts. Pay at least the minimum balance each month, and do it on time. Just that alone can boost your score up to 20 points if you’ve been missing payments or paying late.

    Once you’ve got the minimum payments taken care of, focus on reducing your balances. Your debt to income ratio is a big part of your credit score, and getting your balances down to about 1/3 of your credit limit can help immensely.

  3. Start a debt snowball
    If your debt is manageable (that is, you’re keeping up with all your payments) and your finances are otherwise under control but you’re struggling to pay your debts off quickly, this method is for you.

    Here’s how it works: pay only the minimum payment on all your debts except the one with the lowest balance. Each month, apply all your extra cash toward that debt until it’s paid off. Once the balance is $0, take whatever you were paying (the minimum + extra) and tack it onto the minimum payment of the next lowest balance. Repeat until debt-free.

    You can read more about the snowball debt elimination method on

  4. Actually monitor your spending
    You may be fully aware of the fact that you ate Chick-fil-a three times in the last week, but do you know how much you spent eating out last month?

    Checking your account regularly (daily or weekly depending on how you spend) allows you to visualize your spending and catch some bad habits that are keeping you from reaching your goals (like spending all your extra money on chicken nuggets instead of saving for your mom’s birthday present).

    The good news is, technology makes tracking your spending pretty easy. Try using an app like Mint or Wally. Just link your accounts and cards to the app, and they’ll categorize and color-code your spending for you. You can even set up alerts so you get a notification when your nugget budget is maxed out.

  5. Save an emergency fund of $1,000
    How long could you live on your savings if you lost your job? What if you were diagnosed with a major illness and unable to work (not to mention the medical bills)?

    If thinking of either of those situations made you sweat, you’re not alone. A whopping 51% of Americans don’t have enough money saved to cover three months' worth of expenses, according to

    Set yourself the goal of saving $1,000 this year for emergencies (a sale at Sephora is not an emergency). It probably seems like an outrageous goal, but $1,000 keeps you from scrambling when you get that flat tire and doesn’t leave you high and dry if something else should come up within the same year.

    With a little bit of planning, diligence and our One year, One Thousand Dollars Saving Plan, you can hit that goal in a cool twelve months.

Whatever you choose to do, the point here is to set a realistic financial goal (or two) and stick to it. If you reach your goal early, go ahead and set another one. If you also decide to quit smoking – go ahead and toss that extra $7 a week into your emergency fund.

If you go for #1 (and you should if you don’t already have a budget set up) download our free Plug & Play Budget Spreadsheet. All the fun of establishing a budget, none of the boredom of making your own spreadsheet.

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