New Year’s resolutions can be difficult to keep, as anyone who has tried to spend January losing weight, saving money or doing some other type of self improvement knows. Too often, the resolution is thrown to the side by February, and that includes financial resolutions.
With a late start being better than no start at all, I’m starting February with three financial resolutions that I hope to keep on track. These go beyond my resolution to lose weight, which I started in October 2015 after getting the idea that an early resolution might help motivate me. So far, not much, but I’m working on it.
After losing weight and getting organized, spending less and saving more was the third most popular resolution in 2015, according to the Statistic Brain Research Institute. Forty-six percent got past six months, which gives me some hope.
Here are three financial resolutions I’m working on immediately in 2016:
Find a better business checking account
I accept payment in various ways as a freelance writer and editor, and as owner of three other websites, and I’ve been mostly happy with my business banking account. PayPal works great, but I’m never thrilled with the fees they take out of the payments I receive.
I also have direct deposit from a few clients, which I think is the best solution for both sides. For others, I accept checks, and taking a photo of a check on my phone and depositing it via my banking app is swift.
The problem is with the checking account that I keep my business income and expenses in. When I first started freelancing as an independent contractor, an accountant recommended having a separate account from my family’s checking account. I quickly set one up, but a few years into it my bank changed the requirements for having a free account.
After initially only having to make a few debit card payments through my business account so that I wouldn’t be charged bank fees, the bank eliminated that benefit and required me to spend at least $250 a month with its credit card to avoid a $16 per month account maintenance fee.
I realize that $16 per month isn’t much, but I hate paying any fee for a service that should be free. After all, they have my money all year to profit off of in other ways, such as using it to make loans to others.
I have the bank’s credit card for my business — which is another step my accountant recommended — but spending $250 per month on it is sometimes difficult for my business. I don’t always get there, and face a $16 fee from time to time.
My goal this year is to move my business checking account to a bank, credit union, online bank or anyplace that’s safe and doesn’t charge me a monthly fee. It may be a little difficult to find, but I expect I’ll get there. My current bank will not only lose my business account, but income from my business credit card.
With that change, I’ll need to find a new business credit card, which might be a blessing in disguise. It could allow me to collect more rewards points for hotel stays — something my family already does on most purchases while paying the credit card bill in full each month.
Never pay credit card interest
My financial resolutions are overlapping a bit here, which is a good thing and might make accomplishing them easier. This second resolution ties in some with the first. If I can find a better bank for my business account, I should be able to get a better business credit card.
One of my goals with my credit cards is to never pay interest on them. As I mentioned above, my family uses one card for most daily purchases, and then we pay the bill in full when the statement comes due.
By doing this, we’ve saved a lot of rewards points. Last year, we spent almost a week of our summer vacation without paying for a hotel room because our rewards points paid for it.
But every once in awhile a monthly fee creeps in. I’m either late by a few days making the full credit card payment, or we spent more than we planned to and couldn’t afford the entire bill one month. While this is a rarity, my goal is to not have it happen at all in 2016. Among my financial resolutions, this one costs a lot less than paying an occasional monthly fee on a business checking account. But every dollar counts.
Automate my retirement fund
One of my main financial goals in 2015 was to automate our savings account by making monthly deposits. This automation added up to thousands of dollars saved, and was mostly invisible to us.
The account, unfortunately, isn’t as clean as I’d like it to be, and is a mishmash of saving for emergencies, property taxes, income tax payments and vacations. Earmarking that money in separate accounts is a task for another day of financial resolutions.
I used to automate deposits to my retirement account, but as a freelancer my income varies from month to month, and I found that big transfer to be problematic at the end of the month when money is tight.
My goal this year is to go back to automating my retirement fund by making smaller contributions twice a month. It’s something I’ll still have to keep an eye on and make sure I have enough money in my business account to make the transfer, but I think that’s a better plan than hoping I’ll remember to make a monthly contribution.
One way I’ve funded it in the past is to earmark income from one source — such as residuals from my past work at AOL — to go to my retirement account. But AOL is no longer accepting freelance work (though I do get an occasional direct deposit for past stories of mine that people click on), so I’m trying to find a steady client to take that space in my financial cubbyholes.
Last year I got lucky and got income from a big client for a project, and split the money from it to pay my income taxes for the year and make a big contribution to my SEP IRA.
This year I’m going to automate it, figuring that if such a windfall does come again, I can then decide what to do with it.
What are your financial resolutions?
Those are my financial resolutions for 2016. I’m sure I could come up with plenty more to keep me busy.
But too many financial resolutions, I worry, could keep me so busy that I may not complete any of them. These three should keep me on my toes.