The financial New Year's resolutions you should be making

New Years is a great time for a financial fresh start. As we roll into 2020 we take a look at the financial New Year's resolutions you should be making.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

New Years is a great time for a financial fresh start. The start of a new year brings with it fresh opportunity to take charge of our finances and make our money work for us.

As we roll into 2020, we take a look at the financial New Year's resolutions you should be making.

1. Make a financial plan

Your first resolution for 2020 should be to make a financial plan. This should lay out what you want to achieve with your money in 2020. Your plan should reflect your life goals – do you want to start investing in the ASX, save for a house deposit, or increase your retirement nest egg? Be specific – how much do you want to invest or save? A concrete figure is much easier to measure your progress against than an unspecified goal.

2. Plot the path

Your second resolution should be to plan how you are going to achieve your goals for 2020. If your plan is to save $10,000 to invest in the ASX, figure out how you are going to do this. Breaking your plan down into steps can make this clearer. To save $10,000, you will need to save around $200 a week. Once you know this you can review your budget to see how you can make this happen.

3. Reduce your debts

The most reliable way to increase your savings is to reduce your debt. While you're in debt you are paying interest, which leaves you with less income to save or invest. Focus on high interest debts such as credit cards, personal loans and car loans as a priority. If this seems overwhelming, break down what you owe into manageable chunks. You could start by making extra repayments on your highest interest debt. Once that is paid off, move to the next highest interest debt.

4. Invest in you

Once you have your debts paid off, your next resolution should be to invest in yourself. Resolve to build your financial knowledge so that you are in the best position to manage your money. If your plan is to invest in the ASX, take the time to learn about the share market and start to keep an eye out for shares you may be interested in investing in. Take the time to understand your investment options. The time spent is an investment in your future.

Foolish takeaway

The start of a new year is a great time to work out your goals and financial plans. Then you can put your plans into action to take control of your financial future. These New Year resolutions should help get you started on the right track.

Motley Fool contributor Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Personal Finance

Beautiful young couple enjoying in shopping, symbolising passive income.
Personal Finance

Here's how investors can consider saving and investing $5 a day to make $2,500 a month in passive income!

Anyone can build up passive income. Here’s how.

Read more »

A couple are happy sitting on their yacht.
Personal Finance

There are 2.8 million Australian millionaires. Here's how to become one of them

There are more millionaires amongst us than we might think.

Read more »

Beautiful holiday photo showing two deck chairs close-up with people sitting in them enjoying the bright blue ocean and island view while sipping champagne and enjoying the good life thanks to Pilbara Minerals share price gains in recent times
Personal Finance

Want to retire early with $1 million? Here's how

A mixture of savings and investing can create wonderful results.

Read more »

A man walks up three brick pillars to a dollar sign.
Personal Finance

How to replace your wage with passive income in 3 steps

It’s a straightforward process to replace a salary with dividends.

Read more »

Cubes with tax written on them on top of Australian dollar notes.
Tax

How much tax do your ASX shares pay? Why it might matter

Taxes. One of the two unavoidables in life.

Read more »

a small girl empties a piggy bank of coins onto a table while her mother looks on in the background.
Personal Finance

Relying on bank term deposits to build wealth? You need to read this

Looking to grow your net worth? Term deposits may not be the best choice.

Read more »

Elderly couple look sideways at each other in mild disagreement
Retirement

How would the proposed unrealised gains tax impact your superannuation?

If passed, the impacts could be profound for those with higher-end super balances.

Read more »

a mature but cool older woman holds a watering can and tends to a healthy green plant growing up the wall in her house.
Personal Finance

$50,000 in an offset? The hidden cost of not investing in ASX shares

Saving 7.5% using an offset is not the same as earning 7.5% on shares.

Read more »