5 Financial New Year's Resolutions You Can Actually Stick To

More than two thirds of Americans want to start 2020 on a better financial footing — but picking a smart money-related New Year's resolution can make all the difference.

Topping the list for those vowing to make financial changes were: saving more (53% of people), paying down debt (51%) and spending less (35%), according to an annual study conducted by Fidelity Investments. And while such ambitions are admirable, wide-sweeping and vague goals can be hard to achieve.

So instead of just saying you’ll spend less or save more, Money consulted with financial experts to find out the top things you can easily do going forward to actually make those resolutions a reality and start your year off right.

1. Move your money to a high-yield savings account

“Open an online high-yield savings account for your emergency fund. Online banks offer much higher rates than traditional brick and mortar banks, says Mesa, Ariz., financial planner Amy Shepard, allowing you to earn more than 20 times more than you would with a typical savings account, which pays an average of only 0.09%, according to the FDIC.

“Not only do you get a better interest rate, but having your savings out of sight and out of mind makes it so much easier to leave that money alone rather than spend it,” Shepard adds.

Making the switch is an easy way to save hundreds of dollars more a year while doing nothing. For instance, if you had $16,420 in your account, which is the average balance households keep in a savings account, according to data from banking comparison site MagnifyMoney, and you moved those savings to Money’s Best Bank winner for high-yield savings accounts, SFGI Direct, you’d earn 2.07% in interest or about $340 a year.

2. Monitor your spending

If you want to save more money, it’s important to first learn exactly where your money is going. Scotch Plains, N.J., financial planner Jared Friedman recommends: “keeping track of your spending for the first 60 days of the year. Do not change any habits but instead just keep track. Then on March 1, review your spending to see where it all actually goes.”

Once you know your spending leaks — be it buying lunch out every workday or one too many shopping trips — aim to cut between 10% to 15% of those discretionary purchases out, if you can.

“This method works better than saying only spend 10% of your money on food or 20% on entertainment,” adds Friedman. “With this method you’re not limited by category.”

While you can track your spending yourself using spreadsheets or other notes, digital tools like Mint, Personal Capital, and YNAB allow you to sync bank and credit card information together to easily view your spending history and its impact on your budget.

3. Raise your retirement savings by 1%

If you normally stash 3% or 6% or even 15% of your salary away in your 401(k) each year, challenge yourself to set the bar higher by increasing your contributions by just 1% more. “Make this a habit and increase your contribution 1% every January. You will never miss the money and when you get a raise, your savings will increase automatically,” says Parker, Colo., financial planner Kaleb Paddock.

It might not seem like a big move, but a person earning the median full-time wage in America, which is $919 a week or $47,788 a year, according to the Bureau of Labor Statistics, would save about $478 more annual by making this tiny change that barely dents take-home pay. Of course, you could raise it by more than 1% to see greater savings.

If you don’t have access to a 401(k) plan through your workplace, consider doing the same 1% increase with your traditional IRA or Roth IRA, assuming you aren’t already hitting the funding maximum, or, if self-employed, divert the increased savings to a SEP IRA.

4. Automate your savings

It’s harder to spend money when it never enters your checking account to begin with, which is why Rockville, M.d., financial planner Malcolm Ethridge recommends you automate the savings process and take yourself out of the equation.

“Set a savings goal and then automate the appropriate incremental savings that would equal that goal by the end of the year,” says Ethridge.

“For example: If I were trying to reach a savings goal of $5,000 by the end of 2020, I would set an automatic deposit from my paycheck into an account earmarked exclusively for that savings goal and then try my best to forget about it” he adds. “I wouldn't sign up for online access or e-statements or a debit card. The best thing to do is to take out all of the access points where a human could step in and derail the plan.”

5. Revisit your tax withholding

In 2020, the IRS will launch a redesigned W-4 form, or the form that helps employers collect the correct amount of government taxes from your wages, and while you don’t need to file a new form if you’ve already filed one with your company, it is a good excuse to check over what your W-4 currently.

“Double-check and, if necessary, adjust your withholdings on Form W-4. There are several situations that would warrant an adjustment including, but not limited to: a large tax refund or tax bill in the previous year, marriage/divorce, change in employment status, and change in the number of dependents,” says Atlanta, Ga., financial planner Serina Shyu. “Making this adjustment is quick and easy, and could help mitigate future tax headaches today.

After all, there is nothing worse than carefully saving all year, only to have Uncle Sam come collecting in April and wipe out your emergency fund. And if, you enjoy a large tax refund, know you’re essentially giving the government an interest free year-long loan when you could be using that money to invest in your own retirement account or help pay down interest-accruing debt.