Resolutions Allow Your Bank Account to Experience Savings in 2015


The economy is heading up and resolutions for changed behavior and promises in the New Year seem to be in freefall. If you are one of the few that still make resolutions on New Year’s Day, making a financial promise can help you reach your financial goals.

Ninety-percent of New Year’s resolutions are a waste of time and do not serve a purpose. Only 10 percent stick with the decision for the next 365 days and most people give up after less than a month. With 2015 on the doorstep, it may be time to think about a New Year’s resolution anyway. Those who resolve to improve personal and family money behavior at the beginning of the year find that they get ahead financially faster than those who do not.

Of all the people who made a resolution to manage their money better last year, just over 50 percent said they feel better about their finances now. Only 39 percent of those individuals who did not make a resolution feel better. The survey, sponsored by Fidelity Investments, also found that financial decisions are easier to commit to.

The study also found out that:

  •  41 percent find it easier to pay down debt than lose weight
  • 29 percent of people who made financial resolutions in 2013 met their goal
  • 73 percent of individuals who made financial decisions in 2013 achieved half of their goal

Compare those success rates with decisions dealing with fitness and health. According to the same survey, only 13 percent of individuals committing to improving their overall health met their goal.

Despite the good news, financial resolutions are declining, with just 30 percent planning to commit to one this year as compared to 44 percent in 2013. Leading the list of financial resolutions in the Fidelity survey, a little over half (55 percent) are saving more, while 20 percent are eliminating existing debt and 17 percent are spending less.

Financial resolutions are declining because the stock market has been at record — high — levels and unemployment has slipped below six percent. The economy is better than it has been in years and the urgency to tighten the financial belt first felt during the recession appears to be lifting.

Even with the economic climate getting sunnier, Americans still are underprepared for retirement. According to the survey, just over 50 percent said if they were to receive an unexpected cash gift, their first choice of what to do with it would be pay down the credit cards.

Three Steps to a Financial Resolution

There are just three steps to setting a budget with which one can live.

  1. Identify how current income is being spent
  2. Evaluate the expenses, gauging how they fit in with your overall financial picture
  3. Track ongoing expenses to judge how well you are staying within your guidelines

The process sounds simple when it is looked at in three steps. Reality is different; most people find setting — and following — a budget boring and hard to stick with. Jill Gianola, a financial planner from Springfield, Ohio, suggests three steps:

  1. Start with after-tax income. Review your pay stub to see what your actual take home pay is. Do not rely on year-end bonuses, tax refunds or other money that you have no way of knowing if you will, in fact, receive.
  1. Two-month tracking. Track expenses for just two months. It is easier to download the last two months’ worth of statements than it is to jot down every purchase in a little notepad. Assign a category to each purchase and categorize expenses as you shop. Budget Simple, Yahoo Finance and all have good online tips or tools for helping track income and expenses.
  1. Evaluate. When a good record of where the money is going is gathered, it will be easier to see where to reduce expenses. The goal should be to reduce expenses to less than 90 percent of income.

Establish an Emergency Fund

What if the roof starts leaking, the car motor fails or you find yourself out of work? Relying on the credit cards may keep the house dry, get the car fixed and feed the family, but running up debt may throw a roadblock into the best of financial planning.

By Jerry Nelson


Fidelity Investments
Budget Simple
Yahoo Finance

Photo by Insider Monkey License

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