New Year’s resolutions typically fail when they’re sweepingly ambitious — which can really hurt you when you’re focused on managing your money. Instead, focus on quick, easy-to-manage personal finance tasks that will put you in good shape for 2021 — like the ones you’ll find below.
Top up your emergency fund
Many people don’t have an emergency fund, though most personal finance experts recommend setting money aside for unexpected expenses like medical emergencies, loss of income, or vehicle repairs as one of the most important things you can do.
Sign up for automatic bill payments
Set up automatic payments in your checking account for all of your regular bills, including the minimum payments on your credit card. Otherwise, it’s too easy to miss payments, which can unnecessarily trigger late fees. Likewise, automatic payments to your savings account can help you build a financial reserve, too (say, $US100 ($131) set aside from every paycheck). Check with your bank on how to set up these payments — the option might be buried in your bank’s website or app, but it’s a common checking account feature.
Ditch banks that charge monthly fees
Speaking of banks, consider switching if you’re paying monthly bank fees for your checking account, as there are plenty of them that won’t charge you anything for basic services (though your bank might also waive such fees, so it can’t hurt to ask before closing your account). Some fees are as high as $US15 ($20) a month, which equals $US180 ($236) a year in unnecessary spending. Read more about how to switch banks or get monthly fees waived in this Lifehacker post.
Make a few calls to lower your rates
One of the most underrated personal finance moves you can make is to simply ask your service providers for a discounted rate from what you currently pay — whether that’s your mortgage provider, your insurers, credit card companies, utilities, or cable/internet service providers. Take a few minutes to shop around and compare the fees or interest rates you’re on the hook for with others on offer. Interest rates are currently quite low, which will give you some leverage when contacting your providers.
Update your beneficiaries
It’s easy to forget about marking changes to your beneficiaries, but you should review and update them for life insurance policies and super at least once a year. If you’ve been through a major life change like getting married, getting divorced, or having kids, then your beneficiaries will have changed (e.g., I had my brother as a beneficiary until I got married).
The good news is the federal student loan payment freeze has been extended through Feb. 1, which gives borrowers some additional breathing room. However, since additional student debt relief beyond that remains uncertain, you should start planning to making those payments again beginning in February.Read more
Change your passwords
This can be a pain, but it’s necessary if you want to avoid identity theft. Typically, experts recommend changing passwords every three months, but at the very least, do it once every year. This also might be a good time to sign up for a password manager like LastPass or 1Password.
The average person spends $US237 ($311) a month on subscriptions, either for streaming TV services, apps, or paywalled news providers. But how many are actually used? Are you getting your money’s worth, or could you pare down your list to save money? This Lifehacker post will guide you through the process of conducting a subscription audit.
Change your credit card
The pandemic has impacted the credit card market considerably, and if you’re still clinging to a travel rewards card, maybe this is the time to trade it for a cash-back card, if you don’t have one already. Don’t settle for a high APY rate or overly fancy perks that come with hefty annual fees, especially if your financial situation changed in 2020.
Tweak your budget for the new year
Setting a budget can be intimidating, but it’s more manageable if you view it merely a tabulation of your known, recurring expenses as judged against your income. You don’t need spreadsheets or fancy budgeting apps to do this (although they can be convenient). The goal, of course, is to move beyond living paycheck-to-paycheck and to put money aside for you emergency fund, investments, and other savings goals. This Lifehacker post has an overview of different budget types based on different savings goals, and it’s a good place to start.
Editor’s Note: This article was originally written for a U.S. audience, but we’ve done our best to update for Australian readers.