The start of a new year is the perfect time to reflect on what you want to improve in your life and to create plans to make it happen. There is a good chance that you’re already thinking about resolutions like going to the gym more, eating healthier and volunteering with local organizations.
But what about financial resolutions? The beginning of the year offers the opportunity to focus on what’s going on with your money. With the right plan in place, you can stick to your financial resolutions and end the coming year in a better place than you started it.
Here are 10 financial resolutions — from building your savings to creating better spending habits — along with tips from experts about how to fulfill them.
1. Create a budget you’ll stick to
If you’ve had trouble sticking to your budget in the past, consider taking a new approach with your budgeting. Begin with your personal values and priorities, suggests Tom Drake, a financial analyst and founder of MapleMoney, a financial education website.
“Too often, we start our budgets by putting out numbers that we think we should use,” Drake says. “Instead, look at what matters to you and what goals you’re focused on. Make a budget based on those values and you’ll be more likely to stick with it.”
Don’t forget that a budget can be flexible as well. If you overspend in one area, you can balance it by cutting back in another area. If you discover that you keep having to make changes, don’t abandon the budget altogether. Instead, tweak it part-way through the year and keep moving forward.
2. Pay down credit card debt
The average amount of credit card debt per U.S. adult with a credit card is $5,673, according to CreditCards.com’s compiled statistics on U.S. credit card debt. While the Federal Reserve isn’t increasing interest rates right now, paying interest on that debt can add up and cost you in the long run. Tackle that debt in 2020 to save money.
Consumers who can pay down debt on their own ought to consider payoff methods like paying off your highest debt first (called the debt avalanche method) or paying off your smallest amount of debt first (debt snowball method). Those who are struggling with payments can consider credit counseling, a low-interest balance transfer, a personal loan or even debt settlement.
3. Start an emergency fund
Nearly three in 10 (28 percent) U.S. adults have no emergency savings, according to Bankrate’s June 2019 Financial Security Index. While the same poll found one in four adults have a rainy day fund, their funds don’t include enough money to cover three months’ worth of living expenses.
If you’re one of those Americans, now is a good time to set a goal to build your emergency fund. With an emergency fund stocked with money for unexpected events, you will reduce the chances that you will go into debt trying to cover inevitable surprise costs, like a flat tire or medical bill.
Consider setting up automatic transfers to a savings account, either from your paycheck or from your checking account. With this strategy, the money is “out of sight, out of mind,” reducing the chance that you will be tempted to spend it.
Even having as little as $250 to $749 saved can keep a family from falling on hard times, according to an April 2016 Urban Institute study. So, don’t feel like you need to have three-to-six months’ worth of expenses saved immediately. Start small and keep adding to your emergency fund throughout 2020.
[READ: 5 apps that help you save money]
4. Boost your retirement savings
Saving for retirement is one of the most important aspects of preparing for a sound future. Many Americans worry that they may never retire, so it makes sense to consider your own retirement prospects in the coming year.
Judith Ward, CFP and senior financial planner at T. Rowe Price, suggests starting with your 401(k) at work. An employer-sponsored traditional 401(k) plan takes a percentage of your pretax income and puts it into an investment account. Many companies will also match a portion of your contribution.
“Taking advantage of a company match is a good starting point,” Ward says. “Or, consider starting to save 6 percent of your salary if your company does not offer a match.”
If your plan offers an automatic contribution increase, take advantage of that perk to boost your savings each year — without having to think about it.
The IRS raised contribution limits for 401(k) plans from $19,000 to $19,500 for 2020. People aged 50 and older will be able to make $6,500 in additional catch-up contributions, up from $6,000.
You can also save for retirement if your company doesn’t offer a plan, or if you’re self-employed. Consider opening an individual retirement account (IRA) and make automatic contributions.
“Ideally, you’ll want to take advantage of the tax deductibility of your contribution,” Ward says. “But your deduction may be limited if you or your spouse are covered by a retirement plan at work and your income exceeds certain levels.”
If you’re not interested in the tax deduction, Ward suggests considering a Roth IRA or Roth 401(k). You won’t see an immediate tax benefit, but your money grows tax-free and you won’t have to worry about paying taxes on your withdrawals in the future.
[READ: How to save for retirement]
5. Invest more
Don’t limit your investing to only making tax-advantaged retirement contributions, though.
If you already have an emergency savings account, you might consider setting up an investment account to invest for goals with specific time horizons, like early retirement or saving for a house.
Todd Tresidder, a former hedge fund manager and founder of Financial Mentor, recommends carefully considering your risk tolerance, though, and creating a portfolio that reflects current market conditions as well as your goals.
“The one-way street of rising stock prices and lower interest rates can’t last forever,” Tresidder says. “Investing can help you reach a variety of goals sooner, but you don’t want to be standing naked when the tide goes out, so manage your market risk while you invest.”
[READ: How to start investing]
6. Improve your credit score
Do you know what your credit score looks like? The average FICO score in the U.S. is 703, according to second quarter 2019 data from Experian.
Your credit score plays a critical role in determining whether you get access to financing and other financial services you need. Plus, your credit score can influence your car insurance rates in some states, as well as how much you pay in interest when you do get a loan.
“On-time payments, reducing your debt and making sure you’re careful about how often you apply for credit can help you improve your score,” says Jim Wang, a money expert and founder of the financial education website Wallet Hacks. “Simple steps can make a big difference.”
Use the coming year to start on the path to good credit and watch the rest of your finances improve.
7. Reduce your student loans
Tired of student loans holding you back from other goals? Take the time next year to make a big dent on them — or even pay them off completely.
Mike Crawford, product manager for the student loan round-up app Momentum from Fifth Third Bank, says to start by reviewing your loan interest rates. Prioritize the loans with the highest interest rates and pay extra on these accounts. That way, you will save more in interest.
If your interest rates are high, consider consolidating your loans to get a lower interest rate and more manageable monthly payments.
8. Cook more at home
You might be surprised at how much you spend on eating out each week. Once you add that expense up, you might decide that it makes more sense to cook at home.
“Cooking at home is cheaper, healthier and it builds a useful skill that everyone should have,” says Wallet Hacks’ Wang. “Personally, I plan to get back to more home-cooked meals. The healthy aspect of it saves you money on healthcare costs, and you also save money on food for your family.”
Consider putting those savings toward paying down debt or building up your emergency savings fund.
9. Update your beneficiaries
Have you experienced a life-changing situation recently? If so, your beneficiaries might be out of date, warns MapleMoney’s Drake. Check your retirement and bank accounts, insurance policy and other financial accounts to make sure your beneficiaries are up-to-date. If you’ve recently gone through a divorce, you might want to replace your ex as a beneficiary.
On top of that, it’s probably a good time to review your estate planning documents.
“No one likes to plan for their own death, but having a will or establishing a trust can be an important part of preserving your financial legacy,” Drake says. “It’s really not as complicated as you might think, and if your finances are relatively simple, it doesn’t cost very much.”
Use the Bankrate guide on how to write a will for more information on getting started.
10. Look for ways to boost your income
Sometimes, it’s less about savings and cutting back and more about increasing your income.
“There’s no substitute for making more money,” says Wang. “Consider looking for ways to start a side hustle [or] get a promotion. Or even look for a better job.”
You might need to update a certification to qualify for a higher pay or advancement, but that could be worth the cost if it comes with a pay hike.
Find different ways to increase your revenue streams so you aren’t entirely dependent on one income source. Not only can that strategy help you make more money, increase your savings and reach your goals, it can also provide some protection if you lose your primary job.
Think about what you want from life in the coming year — and the future — and set resolutions that can help you make the most of your financial resources. However, remember that these goals are designed to help you live your life better.
“Don’t forget to spend some time enjoying the here and now,” says Financial Mentor’s Tresidder. “There’s more to life than money.”