Reset Your Money Mindset With These Financial Resolutions
In comes a new year and financial resolutions. How about resolving to change your money mindset?
Contributing Writer at Tally
January 5, 2022
As one year passes and another begins, it's time for New Year's resolutions. There are many useful resolutions to choose from, including going to the gym and spending more time with your family. You can also opt for financial resolutions to help get your money on track.
Sometimes getting on financial firm ground is all about changing your money mindset, which can, in turn, change the way you manage your finances. Here are some money-mindset-changing financial resolutions that can help you get on an excellent financial path for the new year.
View money as a tool
Money is an important part of daily life. It pays the bills, keeps us fed and helps us reach our financial goals. However, we often hold it in too high regard and allow it to take over our lives. We start working too much and too hard, losing sight of the life passing us by.
If you set a financial resolution to view money as a tool to meet your needs instead of a number to reach so you feel satisfied, you can focus on working to live instead of the reverse.
If needed, adjust your budget in the new year so you can cut back on the money you need, thereby freeing up that precious time with family and friends while still maintaining stable personal finances.
Believe you're worth your salary or that raise this year
It's easy to lose confidence at work, wondering if you're pulling your weight. Don't let this turn into an irrational belief you're not worth your salary. You work hard for the money you earn, and your boss sees this value in you.
Make the financial resolution to understand your value in the workplace and what you offer the company. That’ll help you feel confident in knowing you're worthy of the salary you earn and give you the confidence and peace of mind needed to succeed in your job.
Or maybe you got passed over for the big promotion and raise last year. This is a fresh year and an all-new start. Go into this year with the financial resolution to believe you're worthy of that raise — you've earned it.
That self-confidence not only shows on your face, but it can also help improve your productivity at work and really make you shine. And when you shine at work, your boss may take notice and put you at the top of the list for the next big promotion or raise.
See credit card debt as just a number
Some people look at their growing credit card debt and see it as an indicator of poor financial planning or financial decisions. Instead of judging, look at it as just another number — albeit a number you want to bring down.
When you view it objectively, you can focus on lowering it instead of beating yourself up over how you built it up.
Create a firm plan using tried and tested debt repayment methods, such as the debt avalanche or debt snowball, and use the new year to pay down debt and clear your credit report.
Understand your credit score is not a measure of you
Americans tend to put a lot of stock into their credit scores. It helps us get financing with low interest rates when we need it. However, it’s easy to feel down about it when we end up with a bad credit score.
But this year, make the financial New Year's resolution to see your credit score for what it really is: a number. Try not to view it as a direct measure of you.
With this new viewpoint, use tested strategies to help build your credit and improve your financial health, such as:
Taking on a credit-builder loan
Getting a secured credit card
Paying down credit card debt
Taking out a debt consolidation loan
Becoming an authorized user on a loved one's credit card account
Believe in your ability to save money
Whether it's for an emergency fund, a down payment on a house or car or just to buy the television you’ve always wanted, savings goals are important. Help get yourself into the savings mindset by setting a New Year's resolution to believe in your ability to tuck away the money you need into a savings account to reach these goals.
Adjust your monthly budget and living expenses to maximize your savings if needed. Also, when choosing a bank account, make the most of your savings with compounding interest by selecting a high-yield savings account (HYSA).
Don't fret over your retirement accounts
If you look at your 401(k), IRA or other retirement savings accounts and they look a little light in the new year, try to avoid getting overly anxious. Keep in mind, 15% of Americans have no retirement savings at all. And only 17% have between $1 and $74,999 saved. You're not alone in having less in your retirement accounts than you should.
Make a financial resolution to start investing in your retirement. Even if you only start with 1% of your pay going into a 401(k) or individual retirement account (IRA), you're making progress. Start there and increase your contribution with each raise you get.
You may eventually max out your 401(k) and IRA contributions. Then, with careful wealth management and a great financial advisor helping with your retirement planning, you'll be well on your way to retiring comfortably.
View credit cards as useful financial tools
It's easy to view credit cards as the enemy of sound personal finances. However, they can be helpful tools with the right cards and responsible usage. And using them this way can be a great financial resolution.
Start by researching cash back credit cards. Find one that offers the most cashback or reward points at the stores and businesses you use for everyday budgeted expenses — things like groceries, utilities, clothing and dining out. Use this card to cover all your monthly expenses. Then, instead of making the minimum monthly payment, pay off the entire statement balance by the due date.
Paying off the statement balance by the due date means taking advantage of the interest grace period. This is the time between the statement closing date and your due date when your credit card issuer won’t apply any accrued interest from the statement period. So, by paying off the statement balance in full, you don’t pay interest, but you keep all your cash back and rewards.
Financial resolutions: Change your money mindset for the new year
When a new year rolls around, it's time for resolutions. Why not make financial resolutions that push you to change how you view money management compared to the past year?
Whether you're looking to save for emergencies, build your retirement accounts or pay off credit card debt, these mindset-changing financial resolutions can help.
And if paying down credit card debt is your goal, the Tally† credit card debt repayment app can help. The app manages your credit card payments, and Tally offers a lower-interest personal line of credit, helping you pay off higher-interest credit cards efficiently.
†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 to $300.