New Year’s Financial Resolutions You Should Start in 2024

As rising inflation and higher interest rates continue to take a toll on people’s lifestyles and long-term financial outlook, many want to change their goals for the new year.

According to an Allianz 2023 year-end survey, 48% of Americans cite better financial planning as an essential New Year’s resolution in 2024. The figure is up from 43% in 2022 and 33% in 2021, indicating that economic stressors may be increasingly hurting everyone’s pockets.

In the same survey, GenX appears to be the most concerned, with 46% of the generation stating increasing financial stress, followed by millennials at 39% and boomers at 33%.

While typical New Year’s resolutions may focus on personal development and health-related upgrades, many are now focusing on their financial well-being, and for good reason. If there’s anything we know about these resolutions, though, they’re notoriously hard to keep.

Moreover, to achieve long-term financial stability, individuals must have a concrete plan citing good financial habits they can follow faithfully and stick to for years.

Based on current economic indicators, inflation, though slowing, isn’t going away, and the cost of living remains a daily burden beyond regular consumers’ control. It’s never been more timely to develop financial resolutions and get started on building a better financial future in 2024.

Most Strategic Financial Resolutions To Adapt in the New Year

Shifting your financial trajectory isn’t just about creating simple budgeting ideas or feel-good expressions that motivate you for the moment. To change your financial destiny, you need to put more thought into your plans and target the aspects of your finances that produce the most remarkable difference in your future outlook.

Aim for a Higher Savings Rate

When building better finances, your savings are an excellent place to start. Think about savings as a percentage of monthly income. Evaluate your previous savings rates and attempt to boost them—even double or triple them to achieve faster financial recovery.

Whether you are directing these savings for an emergency fund, a retirement fund, or a down payment on an asset, a higher savings rate will accelerate progress toward your goals. Even a slight percentage increase, when implemented regularly, can significantly impact the future state of your finances.

Kick an Expensive Habit

We will all likely have habits that drain a big chunk of our expenses. We need to figure out what they are. It could be a penchant for pricey grocery items, a luxury goods shopping habit, premium online subscriptions you barely even use, daily gourmet treats, or too many nights out.

Identifying it could lead to significant savings you can direct to other aspects of your budget or new investments. Remember that little things add up—how much those habits amass in a year might surprise you. Kicking them brings back more money in your pocket and, as a result, more freedom to build on your New Year money goals.

Work on a Comprehensive Budget

Budgeting is a cornerstone of financial health. Improving your budgeting habits means being aware of every expense—not writing things down only when you feel like it. A comprehensive and detailed budget will help you identify your financial pitfalls and subsequently avoid them. More importantly, it allocates your money best, ensuring it aligns with your personal finance resolutions.

Review your household income, expenses, investments, debt, and savings targets in the first few months of the year. Consider using the latest budgeting tools—SaaS management software or a savings calculator app—to make budgeting convenient and access your information anywhere through your smartphone.

Savings calculator apps and budgeting trackers help personalize and sync your computations with your financial goals. They also increase your awareness of your financial habits and prevent you from making unnecessary purchases.

Pay off Personal Debt

Debt hinders achieving financial freedom, and you must be conscious of how it affects your daily lifestyle. It will likely limit your capability to make investments and build for the future. Hence, it’s essential to review your debt and pay off the ones you can. Adapt a strategy for doing so. Many recommend either the debt snowball or debt avalanche methods.

There are many different types of debt, so you need to be specific about your plan. It is often wise to start with high-interest credit card debt. In 2023, 43% of US cardholders revolved around credit cards they had. This figure means the cardholders continued carrying the unpaid debt to the next month. As a result of this practice, many fall deeper into debt.

Getting off the debt hamster wheel in 2024 means taking a drastically different approach than what got you into mounting debt. Consolidating high-interest variable debts from credit cards or refinancing that debt into a personal loan with fixed monthly payments, flexible features, and more favorable interest rates would simplify and streamline your debt repayment plan.

After refinancing or consolidating your debt, you can negotiate with creditors to improve repayment terms. The overall goal is to make debt repayment manageable. Debt repayment is often combined with a targeted repayment plan, diligent budgeting, and payment tracking to ensure timely payments and avoid missing penalties.

Start Planning for Retirement

According to a study conducted by Bank of America in 2023, the average 401(k) balance for women is only $59,000. For men in the US, the average balance in their 401(k) accounts is $89,000. Neither average can fully support a multi-decade retirement unless other forms of income supplement it.

According to the New York Life survey, only 17% of women felt they were on track with their financial goals. Among male respondents, 26% thought they were on track to meet their objectives in retirement. Women also report having less savings in their retirement funds. A mere 22% have at least $100,000 saved. By comparison, 30% of men have $100,000 or more in their nest egg.

These survey results are concerning. As life expectancies continue to rise everywhere worldwide, our current estimates of a sufficient nest egg need to change.

It’s never too early to plan for retirement. Early retirement planning helps you take advantage of the power of compound interest. Moreover, early planners can take high-risk investments, which may yield higher income if successful.

Retirement planners must carefully select the types of retirement plans and accounts suited to their careers, primary sources of income, age, risk tolerance, and financial goals.

Examples of retirement plans include 401(k) plans, defined contribution plans, 403(b) plans, IRA plans such as traditional and Roth IRAs, and guaranteed income annuities (GIAs). To adequately diversify investments, would-be retirees must do adequate research and consult a financial advisor to create a customized plan.

Stick to Financial Goals You Can Accomplish Year-Round

The year 2024 is the perfect time to refocus attention on financial health. Given the challenging economic circumstances we find ourselves in, it has never been more crucial to adapt our habits to keep up with inflation, increased cost of living, insufficient retirement savings, and rising interest rates. The New Year provides an excellent opportunity to check your finances and review how to improve your financial habits.

Financial improvement is all about building sound practices over time. Hence, when it comes to achieving your New Year money goals, commitment is paramount.

Whether your goal is to increase your savings rate, kick expensive habits, be a better budgeter, pay off debts, or plan for retirement, develop a concrete plan and divide it into actionable steps to ensure “stickiness”—that is, build achievable milestones that create momentum and generate measurable outcomes.