The Top 5 Personal Finance Resolutions You Should Focus On

finance-resolutions-webThe beginning of a new year is a good time to sit down and take charge of your finances. In fact, anytime of year it’s a smart idea to go over your financial situation and make any needed improvements.

In order to give you a simple starting point, here are 5 personal financial improvements you should put into place.

  1. You need to set up a budget. Many people consider budget a “dirty” word so if you like the phrase spending plan better use it instead of the work budget.

You need to sit down and make a list of all your fixed expenses. Be sure you include those expenses which occur only several times a year such as insurance premiums and not just monthly expenses like rent or mortgage. When listing fixed expenses include some funds to be set aside for savings and some funds to be set aside for an emergency fund.

Next list all of your net income. After you subtract your fixed expenses from your net income what is left is your disposable income.

If you are in good shape your income is more then your expenses. When your expenses are more then your income you either need to reduce the expenses or consider finding a way to generate more income.


  1. Keep track of your money. Lots of people have no idea where their money goes. Keep track of all your spending for several weeks or months. This will help you gain control over wasteful spending.
  2. Put money into an emergency fund. Ideally this fund will eventually contain sufficient funds to carry you for 6 months if you have no income coming in. If you cannot manage to save 6 months then start first to accumulate enough funds to last 3 months. You can secure these funds in a money market account. You need to be able to access these funds easily in the event of a financial emergency.
  3. If you are carrying credit card debt work to pay it down. Nothing is going to pay you as much interest as you are paying the credit card company. If you only make a minimum payment it can take 20 years to pay off your credit card account. Stop using your credit cards and pay as much as possible on the account each month. Even when the balance starts going done continue to make the higher payment. Get a free copy of your credit report and go over it to be sure there are no errors. If something is incorrect have the mistake corrected. Once your cards are paid off, if you want to use them, only charge an amount you can afford to pay off each month.
  4. Save some money from every source of income you receive. Attempt to put aside at least 10% of this income. You need to have funds set aside for life events such as buying a home, planning for a baby, paying for a wedding, saving for college or saving for retirement.

Having control of your financial situation will make your life much easier and less stressful.