Financial Resolutions to Kick Start the New Year

What Financial Resolutions Should I Set in the New Year?

Financial goals look different for everyone, but some resolutions can support a wide range of priorities. These seven resolutions may help you focus on key areas of your financial future in the new year:
 

• Create a budget
• Pay off high-interest debt
• Build up an emergency fund
• Review retirement contributions
• Protect important assets
• Strengthen credit profile
• Choose the right accounts 

Create a Budget

A budget helps you keep track of where your money is going and whether your spending aligns with your goals. Budgeting may also help you save more, cut unnecessary expenses, and prepare for upcoming costs.

A good starting point is reviewing your previous year’s:

• Income: How much money you earn each month
• Fixed expenses: Monthly costs that stay about the same
• Variable spending: Costs that can change from month to month
   

Then, review your spending to identify patterns, or recurring expenses and habits. For example, you may find that you're spending more than expected on subscriptions, dining out, or entertainment. Once you've reviewed your spending, you can set realistic spending and savings goals for the upcoming year.

Pay Off High-Interest Debt

High-interest debt is debt with relatively high borrowing costs. Paying it off may reduce the overall cost of borrowing and free up money for other priorities.

As part of your new year's financial checkup, consider reviewing your outstanding balances, interest rates, and monthly payments. You might find opportunities to reduce debt or lower interest costs. 

Build Up an Emergency Fund

An emergency fund is money set aside for unexpected expenses like a car repair, medical bills or a temporary loss of income. Having funds available for these situations may reduce the need to rely on credit cards, loans, or other savings when an emergency occurs.

Even modest savings may provide more financial flexibility when unexpected expenses arise. As part of your resolutions, consider whether your current emergency savings align with your needs and if increasing that balance might strengthen your overall financial position.

Review Retirement Contributions

The amount you contribute to retirement may change over time as your income, expenses and long-term plans evolve. The new year is a good opportunity to review how much you're investing so you can determine whether your current savings strategy still matches your future goals.

You may also want to review your employer’s matching contributions, if available through your workplace retirement plan. Regularly checking in on your retirement savings may help you stay on track and make adjustments if needed.

Protect Important Assets

Protecting your assets is an important part of maintaining your financial well-being. A home, vehicle, savings account, or other valuable assets represent years of hard work. Reviewing these helps you ensure you have the right safeguards in place.

The start of the year can also be a good time to revisit beneficiary designations and important estate planning documents, like wills or trusts. Life changes like a new job, marriage, children or a home purchase may affect these important documents. 

Strengthen Credit Profile

Start the new year by checking your credit report, reviewing your credit score and building habits that support the credit profile you're trying to achieve. For example, consistently paying bills on time and keeping debt manageable may help strengthen your credit profile over time.

A stronger profile might provide access to more borrowing options and potentially lower borrowing costs when you need them.

Choose the Right Accounts

The bank accounts you use might influence how you save, spend and manage your money throughout the year. Choosing accounts that align with your financial goals may make it easier to organize your finances, earn interest on savings, and access money when you need it.

Adding a resolution to review your accounts each year might help you evaluate if your current accounts still meet your needs. For example, a checking account may be appropriate for everyday spending, while a savings account, certificate of deposit (CD) or money market account could support different savings goals. Review each account’s features, fees and terms to ensure your banking tools continue to support your priorities.

How Can KeyBank Help Me With My Financial Resolutions?

If you’re planning your finances for the new year and are not sure where to start, KeyBank has resources and tools to support your current needs and priorities.

Explore checking and savings account options, debt management strategies and retirement planning tips. You can also schedule time with an experienced banker to review your finances and explore strategies that fit your goals in a Key Financial Wellness Review^®.