Money resolutions and goals for the New Year

Last year, I wrote about lowering the bar for happiness. I recently found out my neighborhood doughnut shop is experimenting with the cronut trend, and I became genuinely giddy. So I think I've been doing pretty well with that resolution.

I can't believe it's already 2014, and the new year has me thinking about resolutions again. The start of the year is a good time to clean up your finances and tackle any money changes you may have been putting off. So I assessed my income, savings and spending and came up with a handful of my own money resolutions for the new year.

Max out my retirement, continue saving

Last year, I maxed out my IRA and was able to save in another account. It felt good to be able to save. Last year, my income earnings were relatively high. Recently, that changed drastically, but I still want saving to be a priority. Thus, one of my goals is to max out my retirement. This might mean taking on extra jobs; it might mean cutting back significantly on my spending. Either way, I want to continue to save despite my change in income.

Open an HSA

A year and a half ago, I researched Health Savings Accounts after my dad raved about his. At the time, I decided it wasn't for me. Calculating the tax savings and considering the different health scenarios, it didn't seem worth it to switch from my already low-premium insurance plan. But last April, I turned 30, and my insurance increased. Then, throughout the year, I had some health-related expenses that weren't covered by my insurance (they were, however, HSA-eligible expenses). It would've been great not to pay taxes on those.

A few months ago, I got a letter from my insurance carrier about switching to a new plan with the instatement of the Affordable Care Act provisions. The suggested plan happened to be an HSA-compatible plan at $210 a month. I took to the ACA website to research my other options. Yes, the website loaded, and I discovered I was eligible for a cheaper plan. But I ultimately decided to go with my insurance carrier's new plan and open a Health Savings Account. Why? Well, I've alluded to a few reasons above, but to summarize:

  • Contributions are tax-deductible
  • Tax-deferred interest
  • Tax-free medical expenses
  • Another method of saving for retirement

Switch banks

  • Research credit unions I've been contemplating a big-bank switch, but after reading and hearing so much praise for credit unions, I'm wondering if they might be a better option. Admittedly, I don't know much about them, aside from reading that credit unions have better interest rates and lower fees, but some consider them less convenient. I'll research them more and put together a pro/con piece as I make that decision.
  • Open a checking account with interest Sarah Gilbert wrote about how most people won't change banks, partly because it's a hassle. Guilty. Especially because I opened my bank in another state, I'm worried about how difficult it'll be to close it. Last time I closed a checking account, it was a huge pain in the ass, so I've postponed even thinking about it.But after researching interest rates for another post, I was faced with the realization that my current banking situation sucks. My checking account, for example, not only doesn't earn interest, it also charges me $12 if my balance falls below a certain amount. That's just rude.

Thus, my New Year's resolution for 2014 is to reassess my banking situation, do some research on banks versus credit unions and, finally, switch.

Earn more

Thanks to some helpful people in my work life, I've still been able to pay the bills despite losing a big client. But, as I mentioned, I still want to save for the future, and that means I'll have to earn more. It's a generic money goal to have, but it's also a big one.

Earning more is probably my top money goal for this year. That being said…

Find a balance between work and passion

And here's where I'll veer from the practical side of things and talk about all that right-brain junk.

We've certainly discussed the topic here enough, but it's an important one: jobs versus passions. For example, a guest post last year asked, “What would it take to quit your job and pursue your passion?” Another reader wrote about building up the courage to quit a promising career. And Holly Johnson shed light on the fact that a career switch isn't always what it's cracked up to be.

Despite taking on a writing career, this is always something I've wavered on — choosing money versus choosing passion. Ideally, it'd be great to have both. To some extent, I do have that, and that's pretty cool.

But I have a long list of passion projects that I've postponed because of money. I've always put them on the back burner in favor of earning more. I did it when I graduated and decided to take on a career in the engineering/tech writing industry, for example. I didn't go to school for tech writing or engineering, and I didn't find it interesting. But it paid well, and I learned to be good at it (and, actually, it was kind of fun sometimes).

Generally, I've always teetered in favor of money. I certainly don't regret my decisions; they were good for my finances. But I do think there's a delicate balance in doing what you love and making money. Recently, I was discussing this with a friend, and she pointed to our upbringing. Our parents grew up poor, so they never really encouraged us to pursue our dreams. They did encourage us to be financially independent, though. And that's great, but as adults, we both find it difficult to say no to money, even if it means setting aside our dreams and passions.

On the other hand, before I moved, I had a friend who tried to convince me that following your dreams is worth anything, including taking on hundreds of thousands of dollars of credit card debt. We had a long argument about it, and ultimately, my point was, debt keeps you from doing things, including pursuing your dreams. Despite the fact that Kevin Smith paid for Clerks with a credit card, debt usually makes things worse for most of us. Usually, debt holds us back and distances us even further from our passions. Why? Because instead of focusing on the unlimited potential of your amazing creativity, you're distracted by your crappy financial situation and the looming repercussions of a negative net worth.

Point is, I worked hard for financial security, and I did it so I could live the life I want. As long as I'm secure, I want to spend more time on things I'm excited about. In fact, that's why I recently launched my own silly website, Brokepedia. (Sorry for the shameless plug). It's a blog I've been kicking around in my head for a while but have always been too scared or intimidated or busy to start — but in the spirit of finding balance, I decided to go for it.

I can't believe 2013 is over, and what an eventful year it was. The New Year is a great time to go reassess different areas of your life, including finances. These are my money resolutions and goals — what are yours?

More about...Planning

Become A Money Boss And Join 15,000 Others

Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)

Yes! Sign up and get your free gift
Become A Money Boss And Join 15,000 Others
guest
36 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
FI Pilgrim
FI Pilgrim
6 years ago

I opened my first Roth IRA this year, it was super simple and I don’t know why I didn’t do it earlier. I highly recommend that for anyone who is thinking about it in 2014!

AMW
AMW
6 years ago

My financial situation recently changed for the worst. Hopefully it is temporary but my goal is to not to go into debt because of this.

Beth
Beth
6 years ago
Reply to  AMW

The year I knew I was losing my job my resolution was simply “stay employed”. Sometimes the things people take for granted are the things others struggle with through no fault of their own.

I hope whatever your situation is will be temporary and turn out to have a silver lining somehow. Best wishes.

Kristin Wong
Kristin Wong
6 years ago
Reply to  AMW

Sorry, AMW. I’m in the same boat. Recently, my income went from more than enough to barely covering my budget. Today I’m going to try to write a post about how to keep saving money in this situation.

Things will get better.

Tina in NJ
Tina in NJ
6 years ago

My “resolution” is to get back in the workforce. I haven’t worked for pay in 15 years. On credit unions, we have our mortgage through one with a nice rate. We had a credit card with them and are still getting fraud calls on it months after closing it for, yup, fraud.

Meghan
Meghan
6 years ago
Reply to  Tina in NJ

My credit union sold my credit card account to BOA. I’m glad I don’t have a real problem doing business with big banks, but it pissed many other members off. I was actually not a fan of that credit union at all. Maybe it’s because it got so large? My employer’s credit union is very small, and I’m back to getting good rates (had to take out a 1.99% loan short term) and good service. Check yelp before you sign up with anyone new.

Beth
Beth
6 years ago

Glad to see you’ve started your own website, Kristin! I enjoy your writing and look forward to seeing more. I’m curious to see how you make this goals happen in future posts. One thing I’ve learned about pursuing work you love is to keep a career trajectory in mind. Are you interested in building your business to take on editing, social media, SEO, etc? Do you eventually want to leverage your experience into a steady gig? I work with some amazing freelancers who wouldn’t dream of doing anything else, and some people who have alternated between freelancing and full time… Read more »

Kristin Wong
Kristin Wong
6 years ago
Reply to  Beth

Thanks, Beth, for both the comment and the great advice. Yep–for the right job, I definitely wouldn’t mind full-time. I’ve learned to kind of just go with whatever opportunities arise, depending on how much I enjoy them, how much they pay and how promising they are. At MSN, I never thought I’d do the video stuff, but when they asked me, I simply said yes. Turns out it was a lot of fun, it paid well, and I gained a ton of experience. I’m trying to do what I want while staying open to new opportunities, without veering off course… Read more »

Beth
Beth
6 years ago
Reply to  Kristin Wong

Sounds like you’ll do well 🙂 I think a willingness to constantly learn and try new things is so important. I’m incredibly grateful for all the opportunities I’ve had, even though my career path has had it’s ups and downs!

Brian@ Debt Discipline
[email protected] Debt Discipline
6 years ago

My 2014 goal is to complete our debt repayment. We are on track to be finished by November, we are trying to pull that in by 2 months. Once done with that we will increase savings. Happy New Year!

Dave @ The New York Budget
Dave @ The New York Budget
6 years ago

Thanks Kristin! These are some good goals. Have you seen Mad Fientist’s take on HSAs as well? He has some great insight into how those can be very useful.

I am in the early stages of my blog as well! Best of luck with yours.

Kristin Wong
Kristin Wong
6 years ago

Nice! I haven’t, but I’ll definitely look into it. I planned to open my HSA today, but I think I’m going to do a bit more research, so I’m sure this will be helpful.

Good luck with your blog!

lmoot
lmoot
6 years ago

Oh man, working for income versus working for fun/passion is a whooollle nother topic on its own. For me personally I prefer to do the grunt-work up front, while I’m young and have the energy to put up with doing something I don’t necessarily enjoy. Plus if you think about it, it’s not a bad idea to make the most money in your youth and work your way down. I can sock away more in retirement (and let time take care of the rest), I can invest in things that will provide passive income when I’m tired of working so… Read more »

Kristin Wong
Kristin Wong
6 years ago
Reply to  lmoot

Your comments are awesome.

I totally agree. This is exactly how I switched careers, and I’m glad I did it this way. While most of my 20s were spent working somewhere I wasn’t crazy about, I was earning a lot and my benefits were awesome. Everyone is different, but for me, this was a responsible way of pursuing my “crazy dream.” Having a healthy retirement and emergency fund made it A LOT easier to pursue those goals and not give up.

lmoot
lmoot
6 years ago
Reply to  Kristin Wong

Thank you Kristin 🙂

Isn’t it a great feeling? I think that sort of confidence can definitely help you take the risks that are often needed in those popular(read “competitive”) industries. Doesn’t hurt to also have that experience that you can fall back on if things don’t work out the first time as expected, even if only temporarily. Extra chess pieces on the board is never a bad thing! (or maybe it could be. I don’t know, I’ve never played)

stratagic
stratagic
6 years ago
Reply to  lmoot

Your thinking/experience/actions align so perfectly with my own, I have to ask: are you me?

Good luck, my lovely doppleganger! I know we can do it!

imelda
imelda
6 years ago
Reply to  lmoot

Yes and yes to all your comments.

I recently told someone that I’ve disliked every job I’ve ever had. (I’m 28, but have had several) Their response was – well, duh, you’ve been doing mostly entry-level or low-level work. It’s not supposed to be fun!

I’m hoping that paying dues now will lead to more rewarding work later.

Mike
Mike
6 years ago
Reply to  lmoot

I find a lot in common with your comments as well lmoot. I just finished up my 10th year out of college in the workforce. I have some younger friends that I play sports with and they all seem to want the job that I have now (after 10 years of grinding it out). None of them want to stick with the type of job I had when I started my career (miserable/burnout entry level). I guess it was always that way though, I got to this point by focusing my energy on working hard while everyone around me was… Read more »

jane savers @ solving the money puzzle
jane savers @ solving the money puzzle
6 years ago

I have set some extreme debt reduction and savings goals for 2014

Setting big goals and trying extreme things is the only way I know to make real changes in my life.

Ruth
Ruth
6 years ago

I am trying mortgage elimination. I am paying off my mortgage and will be mortgage(only debt) free in five years. Sadly, there is not enough to go around to put money into an IRA at this time because of our mortgage pay down. Once the mortgage is paid off, we will be able to max out IRA contributions. Please feel free to comment on our strategy.

Dee
Dee
6 years ago

Your new website looks great! I bookmarked it so I can keep following it.

Jim
Jim
6 years ago
Reply to  Dee

Brokepedia also allows you to sign up for alerts when new posts are uploaded! Helpful not to miss anything, since most of what goes up there is helpful if not already known! You Rock Kristin!

Kristin Wong
Kristin Wong
6 years ago
Reply to  Jim

Thanks, both! Really nice to read that from GRS readers.

Carla
Carla
6 years ago

My goal is to start living again. Last year was all about work, work, work. Haven’t had a vacation in years and only took the bare minimum off for national holidays (which was more than the previous year). We got married October 5th and went right back to work on the 7th – both of us. That’s no kind of life!

Part of all of this was fear of impending non-insurance paid medical debt which will happen. Health wise I can’t afford not to give myself breaks and life is too short for this. More money is ultimately what’s needed.

Laura
Laura
6 years ago

Our 2014 New Year’s Goals (not resolutions) include finally living within a budget – I’ve tracked our spending for over 13 YEARS but still have trouble staying within budget. Part of the problem is that while we can cover regular expenses each month, the irregular expenses still catch us with our proverbial pants down. (Per the balanced money formula, we have something like 60% going towards needs and another 60% going towards wants, mostly due to too much eating out because I hate to cook and often arrive home late from work; we may just be eating a lot of… Read more »

Tyler Karaszewski
Tyler Karaszewski
6 years ago

As a bit of an aside, I find it completely useless when people talk about “maxing out” their retirement accounts, because that means a lot of different things to different people. For an IRA, that’s $5,500/year, unless you’re over 50, in which case it’s $6,500. For a 401k, it’s $17,500/year, unless you’re over 50, in which case it’s $23,000. Plus there’s a possible employee match, so you could be putting away even more than that. Then, you can have either account or one one of each, so “maxing out” your retirement accounts can mean anything from saving $5,500 to more… Read more »

Kristin Wong
Kristin Wong
6 years ago

Yes, yes, yes. Good point! I meant that I saved $5,500 in my traditional IRA for the year and a couple thousand in an SEP-IRA. But you’re right– the “max out” level is much higher for the SEP. My goal for next year is to at least save the $5,500, which may be a challenge since I recently lost about 80 percent of my income.

Either way, your “maxing out” sounds awesome.

Marsha
Marsha
6 years ago

My 2014 goal is to get our sons through another year of college without taking on debt (either us or them). To continue saving for retirement. To have a great family vacation this summer, especially since it may be the last one for our nuclear family because our older son will graduate in May 2015.

Teinegurl
Teinegurl
6 years ago

My new years finanical resolution is : To earn more money! Whether that is with the job i have now or something different i plan on moving out so that will increase my expenses so i need to make up the difference. I’ve steadily been increasing my earnings over the last 3 years so we’ll see how it goes. Another one might to buy a used car but im still debating if i should do it or not.

adult student
adult student
6 years ago

In 2013 I was pretty proud that my spouse and I surpassed our goal of saving 20% of our income. In 2014 I’m not sure what to resolve, since we’re looking at finishing school, at least one job search (which is likely to result in a move and a second job search), and trying to start a family – yikes! There’s a huge chance one or both of us will be out of work for 3-4 months, and it’s not easy to predict cost of living for an as yet unknown location, so I guess my main goal is to… Read more »

Eileen
Eileen
6 years ago

I’m paying off my credit cards by June and cancelling two of them!

209 Valley Jobs
209 Valley Jobs
6 years ago

On the topic of switching banks. A few years ago I switched to an online bank account that was offered by a major discount stock brokerage firm. They offer ATM rebates back on any ATM. There aren’t any restrictions either. When I go to Las Vegas, the fees are $5.99 or more – and they refund every single one at the end of the month. This month I got $35 dollars back, sometimes its more. Very useful, plus you can use any ATM knowing you will get the fee back.

Just thought I’d share. Happy new year.

Ve
Ve
6 years ago

Actually changing banks is so much less of a hassle than it seems. I had avoided doing it for years for the same reason…and now I have accounts at 3 banks (well 4, since I relocated overseas and have a local bank). But yes, to start off the new year: –re-reading “Debt-Free Forever” –starting a Spanish/English translation certificate program and working to improve my French –looking for more freelance positions to supplement my income –learning to code (also helpful for freelancing: https://courses.edx.org/courses/HarvardX/CS50x/2014_T1/info) –going to eventually read “The Intelligent Investor” once I have enough money to allocate towards such –continue working… Read more »

Ve
Ve
6 years ago
Reply to  Ve

Oops, here’s the link to the class, in case anyone else is interested: https://www.edx.org/course/harvardx/harvardx-cs50x-introduction-computer-1022

Gina Helton
Gina Helton
6 years ago

We will be starting off the year working on baby step #3 of the Dave Ramsey Total Money Makeover 🙂 Finished 2013 by completing baby step #2 by paying off our debt snowball.

Martin
Martin
6 years ago

After reading ‘Brains versus Capital’ of Guenter Faltin I decided to become more entrepreneurial. I can recommend reading the book1 It changed my view on entrepreneurship.
I hope it’s improving my financial status in 2014.

http://www.brains-vs-capital.com

shares