10 financial resolutions you need to make this year
This year, according to a report by Global News Ipsos, 41% of Canadians will make a New Year’s resolution about their finances. However, a study by the Association of Psychology Newfoundland and Labrador shows that people will fail at their resolution within six weeks of making it. Wherever you are in your financial journey, now may be a good time to review your progress and make a few changes to help your resolutions stick. Read our 10 financial resolutions that can help you take control of your finances this year, and beyond.
1. Make a financial plan.
Understanding your spending habits can help you create a more realistic financial plan that you can stick to. Track your expenses for 3-6 months to get a sense of your spending and create a framework for your financial objectives and priorities in 2022. The key to achieving your financial goals is to create attainable and specific targets in your financial plan that will keep you motivated throughout the year.
2. Improve your credit score.
Your credit score is one of the most important measures of your financial health.Our “Road to Better Credit: Rebuilding your credit history” blog post will help you better understand the factors that affect your score and how to effectively improve it.
3. Set a budget.
One of the best ways to manage your finances in 2022 is to set a 50/30/20 budget. It divides your after-tax income into three categories, 50% for needs, 30% for wants, and 20% for savings or debt repayment. Set up a budget based on this ratio and follow it throughout the year to help manage spending.
4. Take the 52-week savings challenge.
Saving is more about the money you spend than the money you make. You’ll be surprised how adjusting your spending habits for one year can make a huge difference to your financial plan. Using the 52-week challenge, you deposit an increasing amount of money each week for one year. For example, in week one you put $1 away, in week two, you increase it to $2, in week three you put $3 away, all the way up to $52 in week 52 and you could save $1,378 by the end of the year.
5. Build an emergency fund.
While you can’t predict a financial emergency, you can prepare for one. Replacing your car’s transmission, a sudden health crisis, or even an unexpected visit to the vet can cause a financial deficit. A general rule of thumb is you should have enough savings in your account to cover up to six months of your living expenses for dealing with unexpected costs. Take a realistic look at your income and decide how much you can put away every month. One solution could be to choose a set amount per week and have it transferred to another account.
6. Cancel subscriptions you don’t use.
Movies, shows, and music on the go bring convenience to your life, but if you pay for services you aren’t using, you’re essentially throwing money away. Make a list of subscriptions you currently pay for and cancel the ones you don’t use very often. Canceling those unused subscriptions can help you find extra money that can contribute to your savings and you likely won’t miss them when they’re gone.
7. DIY handy work.
If you’re relatively handy, plan to tackle jobs around the house yourself instead of paying someone to do it. It might seem like you will be spending your weekends doing uninspiring work, but you’re not only going to save money from bringing someone in to do the job, but the satisfaction of doing it yourself is a reward in itself. Do know your limits, though. Leave the plumbing, electrical, and other more difficult jobs to the professionals!
8. Always grocery shop with a list.
All of us have walked into a store with the sole intention of buying a carton of milk and have checked out with a cart full of items we don’t need. Shopping with a list not only keeps you on budget, will ensure you don’t forget important items.
9. Quit your daily habit.
Most of us have at one or two habits that don’t seem like they cost a lot of money, but small daily purchases can add up over the month. While it’s important to treat ourselves, consider limiting your coffee drive-thru to two days a week instead of five, or packing a lunch at least a couple of times a week.
10. Use a credit card that gives you cash back on purchases.
Cash back credit cards help you get more out of your everyday spending, making your money work harder for you. The Home Trust Preferred Visa* offers 1% CashBack Rewards1 on all eligible purchases with no cap, even when shopping online.
Apply for a Home Trust Preferred Visa today and start reaping the CashBack Rewards.
*Visa Int./Home Trust Company, licensed user of mark.
1Cash advances, balance transfers, interest, fees and foreign transactions (including online purchases in foreign currencies) are not eligible for CashBack Rewards.
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