3 Financial Resolutions Without the Overwhelm
How to Stick to Your Financial Resolutions This Year
Did you set any New Year’s resolutions at the start of the year? If improving your financial health was one of them, you’re in good company. “Improving financial health” was the second most common resolution for 2024, right behind focusing on improving physical health, according to Forbes. But most resolutions don’t last past February. That same survey revealed that by April, they’re usually long forgotten. Only about 6% of people stick with their resolutions all year.
There’s no “right” time to start a goal or a resolution. I personally had big plans to kick off 2025 by reviewing what worked in 2024, journaling, and setting new goals for myself at the start of the year. But then? I got wickedly sick and couldn’t do anything for the first two weeks of January.
So if your resolutions got off track—whether they weren’t meaningful to you or life just got in the way—you’re not alone.
What You Should Know
Resolutions Don’t Need a Perfect Start – If your financial resolutions stalled, others have been where you are. You can restart anytime in a way that fits your life.
Tracking is Key – Whether paying off debt, spending with intention, or saving more, having a system to track your money makes all the difference.
Sustainable Changes Win – Focus on small, meaningful shifts instead of drastic cuts. Align your financial goals with what truly matters to you.
Knowing What’s Coming In and Going Out
The three most common financial resolutions are paying down debt, spending less, and saving more. The common thread? Knowing what’s coming in, what’s going out, and what areas you can tweak. For all of these money resolutions, having a way to track your money is key.
Maybe you look at your banking app regularly. Maybe you use software that aggregates your accounts. Maybe you prefer good old-fashioned pen and paper or an Excel spreadsheet. It doesn’t matter how you do it—just that you find a system that works for you.
If you’re feeling overwhelmed by tracking your money, start small. Spend five minutes once a week checking your balances and looking at your transactions. The goal is to build awareness, eventually a habit, not stress yourself out.
Emotional Effects of Debt
Debt isn’t just a financial stressor: the emotional effects of debt are real and well-known. Research shows that carrying debt is linked to emotional stress, such as low self-esteem, an increase in anger, and heightened anxiety. Paying off debt isn’t only a smart move financially, it can also help you feel better emotionally.
Financial Resolution #1: Paying Down Debt
Debt repayment is a major focus for many, and for good reason. Debt usually comes with interest, meaning you’re not just paying back what you borrowed—you’re paying extra. And that extra is what makes things so tricky.
A general rule of thumb: if you have multiple debts, focus on paying off anything with an interest rate above 6% while making minimum payments on lower-interest debts. The reason? You can typically earn around 6% investing in other accounts, so prioritizing debts above that rate helps you come out ahead.
Step 1: Get Organized
Gather the following details for each debt:
Minimum payment: The amount required each month to stay in good standing.
Total amount owed: How much debt you still need to pay off.
Interest rate: The percentage charged on your balance.
Step 2: Choose a Debt Repayment Strategy
There are three main approaches to debt repayment: the debt snowball, the debt avalanche, or the emotional way. The debt snowball vs avalanche is the most commonly talked about because they are the most popular. Financially, the “avalanche” method makes the most sense, but the “snowball” method helps with motivation.
Regardless of which debt repayment method you choose, there’s one commonality: make sure you are paying at least the minimum required payment for each debt every single month. Then, if you have any extra money, put that extra money toward your debts.
Snowball method: Pay off the smallest total debt first for a quick win, then roll that payment into the next smallest debt. This strategy will help you build momentum by removing one debt from your repayment list.
Avalanche method: Focus on the highest-interest debt first to minimize the total amount paid in interest. This strategy is the most financially savvy as you pay off the debt you are paying the most interest on, saving you more money in the long run.
Emotions-based method: Focus on the most frustrating or emotionally heavy debt. For example, maybe you focus on a store credit card you felt pressured into opening and want to get off your debt list. Focus on that debt first, then move on to the next one.
Choose what works best for you. There’s no one-size-fits-all answer—go with the strategy that keeps you motivated.
If you’re struggling with staying consistent, try visualizing what life will look like when your debt is gone. What will be different? How will you feel? Where would you choose to put that money instead of toward your debt? Giving yourself that positive mental picture can help keep you motivated.
Financial Resolution #2: Spending Less On Things You Don’t Care About
Spending less doesn’t have to mean cutting out everything fun. It’s about being intentional and making sure your money aligns with what actually matters to you. For example, if you value aesthetics, comfort, and self-expression, it's completely reasonable to use your money to create a cozy reading nook while cutting back on multiple streaming services.
If spending is more about filling an emotional need than actually wanting something, try swapping purchases for other ways to get that same boost:
Need Excitement?
Eat dark chocolate or spicy food.
Watch a comedy special.
Do something new, like try a workout class or visit a new coffee shop.
Need Connection?
Spend time with friends or call a loved one.
Cuddle your pet.
Do a random act of kindness, like sending a handwritten note or dropping off coffee for a friend.
Need a Mood Boost?
Get outside and soak up some daylight.
Move your body—15 minutes is enough to help.
Write down three things you’re grateful for.
Need Stress Relief?
Organize something small, like your junk drawer or your calendar.
Use a foam roller or heating pad.
Take a long shower or bath. Bonus points if you turn on soothing music to boost your spa factor.
Try a Fun Money Fund
If impulse spending is a challenge, try setting up a fun money fund—a set amount you can use guilt-free each month. Before the pandemic, I used to withdraw my fun money in cash at the start of the month. Now, I have a separate card just for fun money in my digital wallet. When it’s gone, it’s gone. This way, you can indulge without throwing off your larger financial goals.
Another trick? Before making a purchase, ask yourself, Will this still matter to me in a week? Is this something I’ll be glad I purchased in a month? If the answer is no, give yourself 24 hours before deciding. More often than not, you’ll realize you didn’t want it in the first place.
Financial Resolution #3: Saving More, With a Purpose
Saving money “just because” doesn’t work for most people. If you don’t have a reason behind it, it’s hard to stay motivated.
What Are You Saving For?
Here are common savings goals, with additional information about why they matter. See if any of these sparks your interest and matter to you!
An emergency fund: This is money set aside in case of a financial emergency, such as losing a job, replacing an appliance that breaks, or unexpected travel to care for a loved one. An emergency fund doesn’t need to be 6-8 months of expenses–that’s a very dated rule–instead, start with $400 and work your way up from there. For more on realistic emergency funds, read this post.
A future expense: Are there things you’d love to purchase but can’t afford it right now? Maybe you’re saving up for a new couch, a down payment for a new-to-you car, or a home office overhaul. Think about what matters to you and start a savings account for it.
Radical self-care: Radical self-care includes saving money so you can take care of yourself. Some of my clients feel like if they are saving money, they can’t enjoy it. With a radical self-care fund, you can save up for something that feels indulgent–like a long phone-free weekend–knowing you planned financially for it.
Make Saving Money Easier
If you’ve set a savings goal, I’m all about making sure you are using every tool available to help you hit your goal.
Use round-up features: Some banking apps will round up each purchase to the nearest dollar and deposit the spare change into savings.
Automate it: Set up automatic transfers to your savings account so you don’t have to think about it.
Use a high-yield savings account: Most checking accounts offer next to nothing in interest, while high-yield savings accounts can earn 10-15 times more. The extra interest adds up over time, helping you hit your savings goals faster.
The Bottom Line
Your financial resolutions should work for you. Paying off debt, spending less, and saving more aren’t one-size-fits-all goals—they’re personal. Small, consistent changes will get you further than an all-or-nothing approach. If you’re feeling motivated, now is a great time to revisit your resolutions or set new ones, so you can improve your financial health.
If you want help, consider hiring me to facilitate a financial wellness workshop to help you, your team, your colleagues, or your clients achieve your financial goals.