Resolving to finally pay off a massive pile of debt or save enough for a dream vacation e at the beginning of the new year can seem like a good idea at the time. But then, you may find yourself back where you started months later, having barely made a dent in your goal.
Often, if resolutions are too broad or too lofty (read: unrealistic) from the start, it can actually hurt your chances of seeing them through.
Instead of setting a broad resolution like becoming a money expert, or eliminating a debt worth half your annual income, try starting small.
Making small behavioral changes — or, microresolutions — may help you inch toward financial freedom without taking on too much at once.
A microresolution, as defined by author Caroline Arnold in her book, “Small Move, Big Change,” is a commitment to a limited, specific, and measurable change in behavior or attitude that produces an immediate and observable benefit.
Arnold argues making small behavior changes that can be incorporated into your daily habits — for example, resolving to take a few seconds to check your bank account balance during a lull in your day — can help establish lasting changes.
The following are 20+ small changes you can make to save more and pay down debt this year.
1. Cut one subscription service right now.
List all of the subscription services you pay for and cross out one or two that you can stand to lose. Using an app like Mint or a service like Trim can help you identify services more easily — Trim will even cancel them for you. A $10.99 standard Netflix account adds up to over $100 per year and a $14.99 Spotify family plan is nearly $200 per year.
2. Ditch your big bank savings account for an online savings account.
Savings accounts at online banks almost always offer a higher annual yield than those at brick-and-mortar institutions. If you put $1,000 in an Ally online savings account today, you’d earn $12.50 in interest after one year. That same $1,000 in a Bank of America account would only earn $0.10.
3. While you’re at it, set up a checking account with an online bank, too.
Online banks notoriously carry fewer fees and often reimburse for out-of-network ATM use. Big banks often charge maintenance fees or require minimum balances to avoid them. Ally Bank, for example, uses ATMs on the Allpoint network, available in most drugstores. Ally also reimburses ATM fees paid during each month up to $10.
4. Ask payroll to set up a recurring deposit to your savings account.
Automate your savings so you don’t have to think about it. If your employer allows you to split your direct deposit, speak with your human resources department to send a portion of your direct deposit directly to your savings account.
“Commit to make saving money happen without you doing anything,” said Dan Andrews, a Greenwood Village, Colo.-based financial planner. “This makes your lazy behavior happy because you don't have to do anything after you set up this system.”
5. Call one service provider and ask for a better rate.
If you pay recurring service bills like a cellphone bill, cable bill or wireless internet service, there’s likely somewhere you can save money. Take a few minutes to call up one of these servicers to see if you can negotiate savings.
If you don’t want to risk waiting on the phone for hours or getting bounced around from department to department in the process, you can try a service called BillFixers, that’ll negotiate your bills with your providers for you. The service costs 50% of the amount you save on your bills in the first year, paid to BillFixers upfront or monthly.
6. Sign up for a no-brainer savings app.
A savings app can take the work out of saving money. Digit watches your spending, then uses an algorithm to calculate how much money to transfer to your Digit savings account periodically. In addition, you earn 1% on the fund in your Digit savings account. Transfer your Digit savings to your bank account anytime, for free. Digit is free to start but after the 100-day trial period ends, you’ll be charged $2.99 monthly. You can easily get a better return on your savings by opening an high-rate online savings account.
But if you’re not a good saver historically and you think you could benefit from the automation that Digit offers, that fee might be worth it.
Qapital helps you set savings goals and rules to match them. The app goes ahead and transfers money toward your savings goal when the rule, like rounding all of your debit card purchases to the nearest dollar and saving the difference, applies. Qapital does not charge any fee for its service.
7. Carry a reusable water bottle.
According to the Beverage Marketing Corporation, Americans spent nearly $16 billion on bottled water in 2016. If you’re even spending just $3 on water a week, you could still save around $150 this year carrying a reusable water bottle (if you buy the bottle for $6).
8. Increase your retirement contribution by 1%.
Adding even 1% more to your retirement account a year can have a huge impact down the line. According to the Economic Policy Institute, “nearly half of working-age families have nothing saved in retirement accounts.”
Your employer’s 401(k) administrator might offer a way to automatically increase your contributions by 1-2% each year. Or you can do it yourself in about five minutes by logging in to your account.
“This is a great way to increase savings consistently without any hassle,” said Hawley. “If you are not maxing out your 401(k) already increasing contributions is important.”
9. Dedicate 5 minutes to reviewing your finances at the end of the day.
Pick a time of the day when you’ll know you have a few minutes to spare (after work when you’re catching up on Netflix?) and review your recent spending. Use your bank’s mobile app or money-tracking apps like Mint or YNAB. Regularly going over your recent transactions helps you stay on top of your spending and savings goals, and give you the opportunity to evaluate your spending decisions.
10. Set reminders to pay your bills on time.
It can be tough to keep all of your due dates straight when you have several bills due at different points throughout the month. Do yourself a favor and look up the due dates of all of your recurring bills, then put them into your phone’s calendar and set a notification to alert you when the bill is due. This task should take all of about 30 minutes if you decide to do all of your bills at once.
11. Pay more than the minimum on one of your debts each month.
Debt can be overwhelming. Start small. Choose one of your debts and vow to pay more than the minimum amount due to your lender.
The average American household carries about $6,416.15 of credit card debt. Using MagnifyMoney’s credit payoff calculator, we found that if the household were to a pay minimum $143 per month, it would take more than five years to pay off the debt. In that time, they would also pay $2,967 in interest, assuming the card charges 15% APR.
MagnifyMoney is a price comparison and financial education website, founded by former bankers who use their knowledge of how the system works to help you save money.