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7 Great Financial Resolutions to Make in 2018

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It’s a new year and many of us have made resolutions every year only to have them fall through in a few months (or in a few weeks). We want to quit a bad habit, get into shape, eat healthier, and the list goes on.

Goals are hard to keep and it’s known that new habits only become routine after about 3 weeks of steady work.

How about having some financial goals? We all want to either get out of debt, save for something we want or to just stop living paycheck to paycheck. What if I could show you how to accomplish some money goals for this year?

Here are some great financial resolutions for 2018:

1. Write Down What You Want To Accomplish

 What do you want this year? No debts? Go to college? A special vacation for yourself or your family?

Pick a reasonable goal, one you can attain – winning the lottery is not a realistic goal. Do your homework on how much this goal would cost and display it.

Create a goal thermometer and place it where you and everyone can see it. Why show everyone – to hold you accountable. Now that people know your goal they can hold you to it and help you out by reminding and encouraging you.

Another positive point to telling people (even though you may see it as a negative one) is that they’ll know not to ask you out on expensive shopping trips, bar-hopping, and other tempting splurges.

Why stop at one goal? Make a few of them and rank them in order of importance. Only when you’ve reached the first goal can you shift focus on to the second goal and so on.

Create a budget where most of the available cash goes towards your first goal. Available cash means the extra money you’ve found after trimming your budget down.

Create a budget category for your other goals too, but put the minimum payment on those for now. Once you’ve reached your first goal, you can switch the budget around to have the available cash focused on your second goal but still keep paying a bit on the other goals.

Maybe this is a better explanation:

You have $500 extra money available a month:

Goal #1 – Pay off 4 DebtsGoal #2 – Buy a Used Car $3,000Goal #3 – Pay for a $1,200 Vacation
Debt Budget: $760Debt Budget: $260Debt Budget: $260
Car Budget: $50Car Budget: $550Car Maintenance: $50
Vacation Budget $50Vacation Budget: $50Vacation Budget: $550
Goal Reached! Start #2Goal Reached! Start #3Goal Reached!

When you’ve accomplished all your goals – Congratulations you got what you wanted and you have $500 extra a month! Reimburse the funds towards new goals, into your savings, or add one item that you eliminated from your budget back in.

2. Create a savings plan

Even if you created a savings goal in Step One you should still create a savings plan for the year in your budget. Having some savings built up helps with emergencies, things not planned in your budget, and Christmas shopping at the end of the year (by following the savings plan below).

Having savings for emergencies such as appliance break-downs, medical emergencies and other things is a lifesaver and doesn’t screw up the budget.

It’s a good idea to have a completely separate savings account – one not attached to your debit card. This way you are not tempted to dip into it for impulse purchases.

Open another savings account for those unplanned events you didn’t plan for in your budget such as a school trip, unexpected guests (needing more groceries), and so on.

Lastly, start a weekly savings jar or envelope to put money aside for all that year-end Christmas shopping.

You may have seen this system around on social media (like on Pinterest), but it’s effective and I’ve used it two years in a row now without needing to scrimp for money in November and December.

Here’s how to do it:

WeekDepositSaved WeekDepositSaved
1$1.00$1.0027$27.00$378.00
2$2.00$3.0028$28.00$406.00
3$3.00$6.0029$29.00$435.00
4$4.00$10.0030$30.00$465.00
5$5.00$15.0031$31.00$496.00
6$6.00$21.0032$32.00$528.00
7$7.00$28.0033$33.00$561.00
8$8.00$36.0034$34.00$595.00
9$9.00$45.0035$35.00$630.00
10$10.00$55.0036$36.00$666.00
11$11.00$66.0037$37.00$703.00
12$12.00$78.0038$38.00$741.00
13$13.00$91.0039$39.00$780.00
14$14.00$105.0040$40.00$820.00
15$15.00$120.0041$41.00$861.00
16$16.00$136.0042$42.00$903.00
17$17.00$153.0043$43.00$946.00
18$18.00$171.0044$44.00$990.00
19$19.00$190.0045$45.00$1,035.00
20$20.00$210.0046$46.00$1,081.00
21$21.00$231.0047$47.00$1,128.00
22$22.00$253.0048$48.00$1,176.00
23$23.00$276.0049$49.00$1,225.00
24$24.00$300.0050$50.00$1,275.00
25$25.00$325.0051$51.00$1,326.00
26$26.00$351.0052$52.00$1,378.00

You now have saved $1,378 for Christmas shopping! Don’t forget to add your pocket change to the savings jar throughout the year too. I saved about $200 of loose change in a year.

Before you start going “I can’t afford $30 or more a week!” remember week 30 is July 23 – July 29th, which is mid-year and you should have some of your goals accomplished by now – use some of those funds towards the savings plan.

If you’re a constant debit card user and don’t have cash or change to put into a savings jar, you can do this digitally instead. Create auto-payments to your savings account (as discussed below), or download an App that will do it for you.

Apps such as Acorns and MoneyBox are good ones to help you out.

3. Create a debt payoff plan

 Gather up your debts and calculate how much you owe and work out how much you can pay for them in a month. This is crunch-time and keep your goals in mind when determining an amount.

 One way to help pay them off faster is to set up weekly bill payments instead of the usual one-time monthly minimum payment. Paying a little bit every week actually pays your debt off faster.

Let me clarify:

  • A credit card has the minimum due of $25 a month. In one year that’s $300 paid on it.
  • Pay the same credit card $10 every week. In one year that’s $520 paid.

So, you’ve paid $220 more on that one credit card! Do this for several debts and there’ll be less strain on your budget as the amount is the same every week as opposed to different payment chunks that can be disruptive.

  • You have 4 credit cards with their minimum dues costing $150 a month. Total you’ve paid in one year = $1,800.
  • Pay each card $15 a week = $260 a month. The total is $3,120 paid in a year. That’s $1,320 more.

Don’t forget that once a debt is paid off to apply that amount to the next debt.

4. Cut things out

I mentioned earlier about trimming down your budget and finding extra available money and you may be wondering how to do this.

First list all your living necessities – rent/mortgage, groceries, utilities, consumer debt and anything work-related – these are the things you need to pay for.

Then list everything else you’re spending money on – cable, subscriptions, memberships, entertainment and so on and so forth. This list is where you start cutting things out.

Need a little help?

  • The average Cable bill is about $103 a month. Instead get an antenna and watch local channels for free and Hulu or Netflix for about $8 – $10 a month instead.
  • The average Gym membership is $40 to $50 a month, switch to doing exercises at home from DVDs or YouTube instead
  •  That drive-thru morning coffee (Yes I know, a recurring theme with me) costs $2.10 for a 16-ounce grande. In a month that’s $45.50 for 1 cup in a workday. Home brewed coffee only costs about $.08 per 16-ounce serving which is $1.73 a month.
  • Bar-hopping – the average cost of going out with friends every Friday and Saturday night costs you around $560 a month alone! (Average $65 spent a night). Cutting this back to just 2 nights a month only costs $130.

You get the idea now? These four eliminations alone would save you over $600 a month!

5. Learn new habits

 Learn new habits to reinforce your spending and savings plans. Habits such as:

  • Learning to comparison shop
  • Cutting back on impulse shopping
  • Eating out less
  • Cooking more
  • Making more stuff yourself (instead of buying)
  • Buying Second-hand
  • And a lot more

If you’re serious about accomplishing your financial goals then you’ve got to change your habits. Usually, your spending habits are what got you into this financial fiasco in the first place. Otherwise, you’ll find yourself in the same frustrated rut (or in even deeper).

6. Automate any processes

Put your savings plan and bills on automatic payments. Most online banks have a section for account schedule planning and payment set-up available to use.

It would only take a little while to set up the savings plan I mentioned earlier in your banking calendar. Schedule these withdrawals a day or two after your expected paycheck deposit.

For those payments that cannot be automated, be sure to mark them on a calendar or set up a reminder on your smartphone or computer to notify you. This will prevent any missed payments (and getting into more debt).

One bonus of doing everything automatically is that it helps improve your credit score. Steady payments without missing any dates can slowly improve the overall score. This, in turn, will help with future purchases such as buying a home.

7. Follow through

 Like I said in the beginning, we make resolutions only to have them fall through in a few months. So, you really need to follow through otherwise all this planning and excitement was for naught.

Create ways to remind you to keep going. Create reminder notifications, wrap a note with your goals on it around your debit card, use goal thermometers like I mentioned earlier, or even give yourself a small reward after completing a goal.

A good iOs App to have is Productive – Habit Tracker which will track your habits, progress towards your goal and even encourages you by marking “perfect days” you’ve achieved.

The whole purpose of making financial resolutions is to get to a better place money-wise than you were last year. It’s a great feeling accomplishing a goal or two, especially when it comes to your finances. Don’t put off this valuable life-changing step for you and your family.

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