12 New Year's money resolutions

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Well, it's that time of year again to put the long holiday season behind us and start the New Year fresh. Like most of us, you may be feeling a bit of a holiday hangover when it comes to overspending. We're not judging, everyone has been there when it comes to putting a little more strain on your wallet than you may have intended to during the holidays.

The good news is that the New Year provides the perfect opportunity to reframe your monetary mindset and set yourself up for a better financial future in the coming year and beyond.

Here are 12 New Year’s resolutions to consider as you create a new game plan for money management this year.

1. Build your emergency fund

We’re not trying to start the New Year off on a negative note, we swear. But, emergencies are an inevitable part of life, which is why it's important to ensure you’re saving enough for unexpected tough times, as well as growing your balance over time.

An emergency fund is a large, easily-accessible sum of money set aside for when the worst happens. As a general rule, aim for enough to cover for at least 3 to 6 months’ worth of expenses.

Start the New Year by setting up an emergency fund that will help ensure that you’re at least partially covered if something goes wrong like an accident, illness, unanticipated home repair, or the sudden loss of your job. 

Want to reach your emergency savings goal faster? A Varo Savings Account offers a high annual percentage yield (APY), no fees, and easy auto-saving tools that can help you grow your money.

2. Save more

As one of the most popular resolutions, we had to include it here. But “save more” can seem pretty general. While saving when you can is always a good idea, it helps to take a hard look at your budget and determine if there are any areas where you flip spending to saving instead.

One way to achieve success with this resolution is to force yourself into it by setting up a recurring (e.g., monthly) automatic transfer from your checking to your savings account. 

Want a savings account that does the work for you? A Varo Savings Account comes with tools that make automatically transferring money from your Varo Bank Account to your online Savings Account easy. The Save Your Pay feature takes a percentage of your direct deposits (which you choose) and transfers it to your Savings Account. The Save Your Change feature rounds up every transaction from your Varo Bank Account to the nearest dollar and transfers the amount to your Savings Account.

3. Get your tax materials in order

Gathering what you need to file with the IRS in the coming tax season doesn’t have to be a huge hassle.

As soon as you get your W-2 or 1099 forms from anyone who paid you the previous year, create a file for storing them safely rather than just adding them to your mail pile. Many of these forms are distributed electronically nowadays, so set up a folder on your computer that you can easily access when it’s time to do your taxes. 

If you generally claim tax deductions or credits, need to provide proof of health insurance, or have a list of items you need to discuss with your accountant for possible tax breaks or amounts owed, ensure you have the proper documents stored in the same place to make it easier. 

Nobody wants to spend the weeks leading up to the April filing deadline scrambling to find all the necessary documents they need to get their taxes done. File or store them safely as they come to avoid adding to the stress of tax season. 

4. Make donations to causes you care about

Charitable donations aren’t just an opportunity to keep the season of giving going into the New Year, they’re also a great way to contribute to causes you care about and celebrate the joy of giving back. 

And speaking of taxes, charitable donations can provide a pretty hefty tax deduction if you’re going to itemize your deductions this year. Plus, look at it this way, wouldn’t you rather give that money to people in need than the IRS (no offense)?

5. Save for retirement

It’s never too early or too late to start saving for the future. Use the New Year as an opportunity to reassess your retirement planning goals and recalibrate how you want to contribute to either a new or existing retirement account. 

Even building up $10,000 in your 401(k) or other retirement investment account can be a great start towards creating a future nest egg. Not to mention, as this money is taken out of your pre-tax income, often automatically, which means you may find you don’t even miss it. Making strides to get on track with retiring on time can also provide the peace of mind that you’re investing in your future.

6. Build your credit score

The New Year isn’t just “your year”, it’s also the perfect opportunity to give your credit score the attention it needs. Regularly monitoring your credit report is one of the best places to start when it comes to boosting your credit score.

Having a good credit score can open a lot of doors in terms of better rates on loans, credit cards, housing opportunities, and even insurance. In a nutshell, the higher it is, the more it benefits you. 

Because federal law requires all 3 major nationwide credit bureaus that watch over your credit (Equifax, Experian, and TransUnion) to provide you a free credit report every 12 months when asked, you can access your credit report quickly and easily by using a site like AnnualCreditReport.com.

When you check your 3-digit credit score, take a hard look at the categories where you’re strong and where you need some work. If you’re using too much of your available credit, make a plan to pay down debt on your credit cards this year. If you missed some bill payment last year, set up autopay or create an automatic reminder system for yourself. You can also consider negotiating lower interest rates, diversifying your credit, or refinancing your loans to get your credit score back on track in the long run.

7. Make a plan for tackling debt

Most of us carry some form of debt, but the trick is to have a plan in place for how you intend to pay it down over time, or better yet, eliminate it altogether.

Determine how much debt you actually have between credit cards and auto, home, or student loans. Then, figure out how long it will take you to pay it off. Looking at that timeline, you might decide you want to get more aggressive in terms of making more frequent or larger payments, as well as refinancing or negotiating a lower rate.

Either way, make sure you’re starting the New Year feeling informed about the progress you’re making on your debt. Just as importantly, make sure you know how and when you’ll get it all paid down. You may find that even just having a plan in place makes any amount of debt seem like a challenge you can tackle with confidence rather than an impossible uphill battle.

8. Do your taxes early

Remember what we said about getting your tax materials in order early? The same goes for actually filing your taxes, especially if you’re already on top of keeping all the necessary documents organized and stored securely.

Accountants get busy during tax season, so if you need to make an appointment, do it earlier rather than later to ensure you have enough lead time to get them done (and paid) before the April deadline. If you have all of the necessary forms and documents ready to go well before that, what’s stopping you from getting your taxes done early to save yourself some stress? 

Not to mention, if you’re worried about owing anything, you want as much time as possible to figure out how you’re going to pay before the deadline to avoid incurring any extra fees or penalties. 

9. Make tech your budgeting friend

In the past, budgeting could sometimes be difficult and tedious. Fortunately, technology has made it easier and there are now a number of ways to utilize online and app-based tools to get the job done quickly and efficiently.

Check out this list of budgeting apps for streamlining and simplifying the way you manage money in the New Year.

10. Switch from plastic to paper

Overall spending can sometimes go up when using a credit card versus cash. If you have credit card debt, resolve to make a simple change to keep that debt from growing—use cash instead of card to help you stick to only using the money you have 

Everyone can appreciate the convenience of a credit card, as well as the appeal that it can be paid off at a later date. But sometimes, inconvenience is what keeps us from overspending or making purchases that we’ll regret later. 

11. Review your insurance policies

Many of us are overpaying for our insurance policies without even knowing it. Luckily, there are a number of insurance comparison websites nowadays that can help you determine if you’re overpaying and shop around for a better policy. Nerdwallet, The Zebra, Compare.com, and Gabi are a few places to start.  

Also, it’s worth exploring whether bundling your car insurance with your home or renter’s insurance can save you a fair amount without having to go through multiple companies for multiple policies.

12. Get smarter

Responsible personal finance shouldn’t feel mysterious or unachievable. It’s your money, after all, and at the end of the day, you’re the one who’s in control of what you do with it.

What money topic is most daunting for you? Whether it’s taxes, saving for retirement, or refinancing a loan, resolve to learn more about it this year. A few hours reading articles and blogs or taking an online course can make a huge difference in terms of learning the basics, if not mastering the topic. You can wrap up the year feeling more informed and better able to champion your money. 

Sometimes the most successful resolutions are the ones you take your time with, and doing too much all at once can make achieving one, if not all of them, feel daunting. Changing your financial mindset takes time, so go at your own pace and don’t pressure yourself to accomplish everything at once. And don’t forget to give yourself a bit of downtime as you recharge your batteries after the holiday season. Cheers to a happy, healthy, and successful New Year ahead! 

Unless otherwise noted above, opinions, advice, services, or other information or content expressed or contributed by customers or non-Varo contributors do not necessarily state or reflect those of Varo Bank, N.A. Member FDIC (“Bank”). Bank is not responsible for the accuracy of any content provided by author(s) or contributor(s) other than Varo.