Ten New Year鈥檚 resolutions for your wallet
Love or hate New Year鈥檚 resolutions, there probably are a few you could stand to make for your wallet鈥檚 sake. They can be short-term, easy fixes to save money throughout the year, while also potentially helping you achieve larger financial goals.
Here are my 10 suggestions to make sure you start off 2017 on the right financial footing:
1. Clean out your wallet.聽A cluttered wallet isn鈥檛 just bulky; it also can be expensive if you鈥檙e paying for cards you don鈥檛 use. Start lean and mean in 2017. Review the cards and figure out how they benefit you. Many people, myself included, signed up for some cards merely for their cool factor or maybe to pursue a one-time benefit 鈥� such as a juicy sign-up bonus that has long since been exhausted. At best, these cards can be a distraction and waste of space. At worst, they can cost you an annual fee without making up for it in benefits. Keep only聽聽that you鈥檒l actually use or cards that are important to聽.
2. Prioritize your purchases.聽Healthy budgeting may sound about as fun as healthy dieting, but success for both often can start with something as simple as understanding what works best for you. At its heart, a budget helps you recognize trade-offs in your purchases. Movies or dining out? Game console or summer vacation? New clothes or weekend getaway? Until you鈥檙e able to identify and plan for these trade-offs in advance, you鈥檙e not in charge of your money.
3.聽Optimize your credit cards.聽Whether you鈥檙e trying to maximize rewards or minimize the cost of credit card debt, you probably have room for improvement. At this point,聽聽for rewards, so make sure you鈥檙e earning at least that much on every purchase. And if you鈥檙e looking to minimize the cost of debt, a 12-month,聽聽is a good baseline. If you鈥檙e unsure what kind of card you might qualify for, I recommend checking your聽聽or seeing whether you聽.
4.聽Upgrade your checking account.聽As I emphasized a couple of columns ago,聽. If you鈥檙e paying fees for your checking account regularly, that鈥檚 a sign you could be doing better 鈥� either with your own money management or your choice in banks. A new account might also come with new capabilities such as mobile check deposit or better ATM access. Here鈥檚 a handy guide to聽.
5.聽Upgrade your savings account.聽There鈥檚 a fair chance you could be earning higher interest in the coming new year than you did in 2016.聽聽are offering annual percentage yields of 1% or higher, which we hope will rise since the聽聽in December.
6. Open a聽.聽Still writing and receiving physical checks to and from friends and family? What a hassle. It鈥檚 nearly 2017, not 1987. If you need to pay someone back quickly and easily 鈥� whether for baby-sitting, splitting utility bills or sharing a restaurant tab 鈥� open an account on a peer-to-peer (P2P) payment app such as Venmo, PayPal, Zelle or Square Cash. Ask around to see what鈥檚 popular among your friends, as they鈥檒l need to use the same app to receive or send money.
7. Boost your savings rate.聽Saving money can be hard, especially if it鈥檚 for a less-immediate goal such as聽, an emergency fund (see below) or a down payment on a home. Here are tips to boost your savings rate: (1) If your聽, make sure you鈥檙e contributing enough from your paycheck to get the full match. (2) Divert some of your wages automatically into your savings account before you have the chance to spend it. (3) Plan now to save any windfalls, such as tax refunds, gifts or the occasional lottery winnings. (4) Check your credit card and checking account statements to see whether you can cut any charges for recurring services that aren鈥檛 needed.
8. Build an emergency fund.聽A key measure of financial freedom is the ability to cover short-term emergencies with cash instead of by taking on debt. That said, many of us already have plenty of debt, and it鈥檚 often difficult to decide between saving cash or paying down that debt. Here are the views of fellow columnists聽听补苍诲听. The short story? All things being equal, putting a little money in the bank generally should be prioritized in most cases.
9.听.聽Sure, credit card rewards rates won鈥檛 make you rich, but the 1.5% you could earn back on every purchase adds up. It can help boost your savings or make a significant dent in a planned purchase.
10. Use your airline miles.聽Airlines historically devalue points on their loyalty programs every few years, and you鈥檒l also want to make sure there鈥檚 no expiration policy on your points or miles. Saving them for some big future vacation might sound nice, but if they need to be redeemed by a certain point, don鈥檛 let them slip through your fingers.
Sean McQuay is a credit and banking expert at NerdWallet. A former strategist with Visa, McQuay now helps consumers use their credit cards and banking products more effectively. If you have a question, shoot him an email at聽asksean@nerdwallet.com. The answer might show up in a future column.
This story originally appeared in .
