Starting the new year with financial goals can help set the tone for a prosperous year ahead.

Adding resolutions like improving credit scores or paying off credit card debt can make a significant impact.

Save More

Focus on building savings

Saving more money remains one of the top financial resolutions. It can be achieved through various strategies such as increasing 401(k) contributions, setting up automatic transfers to high-yield savings accounts, or cutting back on unused subscriptions.

Several high-yield savings accounts currently offer attractive annual percentage yields (APYs) of 5% or close to it. Options include UFB Portfolio Savings, Bask Bank Interest Savings Account, and LendingClub LevelUp Savings. Additionally, credit cards offering competitive rewards, like the Wells Fargo Active Cash® Card, provide opportunities to earn cash back or points to offset expenses.

Improve Your Credit Score

Steps to boost credit scores

For individuals with credit scores below 670, raising the score in 2024 should be a priority. Timely and full bill payments, reducing debt, limiting new accounts, and controlled spending are key strategies. Signing up for services like Experian Boost® can also provide a credit boost by including utility, cell phone, and streaming service payments on credit reports.

Create a Personal Budget

Budgeting for better financial control

Budgeting can help track spending habits and identify areas for cost reduction. Starting with fixed expenses, such as rent, utilities, groceries, and savings, provides a solid foundation. Budgeting apps like You Need a Budget (YNAB) facilitate efficient management using the zero-based budgeting method. Reviewing annual credit card spending by category can also help tailor a budget to meet financial goals.

Pay Off Credit Card Debt

Reducing debt efficiently

Paying off credit card debt is a common resolution, especially since the average credit card balance has reached $6,088, according to TransUnion. Consolidating debt with balance transfer credit cards, such as the Citi Simplicity® Card, offers an interest-free period of up to 21 months. Familiarizing with terms like the intro period expiration and planning payments to clear balances can maximize benefits.

Pay Full Credit Card Balances Each Month

Importance of timely payments

Payment history significantly affects credit scores, making it vital to pay credit card balances on time and in full. This reduces credit utilization rates and eliminates interest charges or late fees. When full payment is not possible, at least making the minimum payment on time avoids penalties.

Track Credit Card Applications

Managing applications wisely

Applying for too many credit cards in a short period can impact credit scores due to frequent inquiries. Spacing out applications allows for better management and reduces the negative effects on credit scores over time.

Check Credit Scores More Often

Monitoring financial health

Free resources like Chase Credit Journey, CreditWise® by Capital One, and Discover ScoreCard provide monthly updates on credit scores along with insights into influencing factors. Regular checks and simulations to understand the impact of financial actions can enhance financial planning.

Check Credit Reports More Often

Staying informed

Regularly reviewing credit reports can help detect fraud and ensure accurate reporting. Annualcreditreport.com allows access to one free credit report from Experian, Equifax, and TransUnion each year, as authorized by federal law.

Sign Up for Credit Monitoring or Identity Theft Protection

Protecting personal information

Credit monitoring and identity theft protection services provide alerts about potential fraud. Free services like CreditWise® monitor personal information and send automatic alerts, ensuring better protection against identity theft.

Tailoring financial goals to individual circumstances is crucial. While paying down debt aggressively may help, maintaining a balance to ensure sufficient cash flow is equally important for long-term financial stability.