Resolving to finally pay off a massive pile of debt 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.
Check here to compare the best online savings accounts.
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 .
Check here to compare the best checking account offers today.
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. Don’t withdraw money from ATMs that charge a fee.
Try to pay less money to access your cash reserves this year. Do your best to avoid ATMs that charge a fee. Often, you are charged twice — by both the owner of the out-of-network ATM and your bank just to take out your cash. For example, Bank of America charges its members $2.50 to use out-of-network ATMs and non-members $3.00. Now let’s say the out-of-network ATM you’re using also charges its own $2 fee. You could pay a nearly 10% premium to take out $50 or more if you’re taking out less money.
6. Identify your guilty pleasure and vow to only use cash to pay for it.
If you’re having trouble controlling your spending in a certain area, like restaurants or new clothes, Monterey, Calif.-based financial planner Catherine Hawley recommends limiting yourself to a cash-only budget in that spending category.
“This strategy helps create awareness of how much one’s spending in specific categories. Using cash makes spending tangible,” Hawley said.
For example, take out $50 for the week to spend dining out. If you spend $50 the first day then there’s no more spending in this category until the next week. But, if you can hold on to the cash, you can add it to what you’ll have to spend the following week.
7. Make a list of what you need before you go to the grocery store.
Making a list saves you time and money — preventing impulse purchases once you get to the store and stopping you from buying more food than you need.
8. 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.
9. Aim to bring lunch to work once this week.
According to a 2015 survey commissioned by Visa, Americans spend $2,746 a year on lunch alone. Take the opportunity to redirect that money elsewhere in your budget. For a more challenging task, try setting aside some time once a week to prepare your lunches for work for a day or two in advance.
10. Sign up for a no-brainer savings app like Digit.
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.
11. 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).
12. 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.”
13. Check your retirement allocations.
Take a peek at how your retirement money is being invested. Resolve to take a few minutes this year to check your retirement allocations to make sure they still make sense for your age. A common rule of thumb for making sure the investment risk you’re taking matches your age is holding a percentage of stocks equal to 100 minus your age.
The remainder should be invested in lower-risk investments like bonds and government debt. For example, someone who is 60 years old should have 60% of his investment in the stock market, and 40% invested in safer investments. If you’re more aggressive, subtract your age from 110.
14. 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.
15. Calculate your net worth.
Your net worth is one of the most important numbers to know in life because it’s is the best way to understand your financial health. Knowing how much you are worth helps you track your debt paydown progress and keeps your debt-to-income ratio in check.
Your net worth is easy to calculate. Your net worth is the number you end up with when you add up how much you own — assets like your 401(k), or investments in the stock market, or the current value of your home — and subtract how much you owe — like credit card debt, student loan debt, an auto loan, or what you owe on your mortgage.
16. Automate your monthly credit card payments.
Out of sight, out of mind isn’t always a great approach to take with your finances. That being said, taking a few minutes to automate your credit card payments may help you avoid the sting of paying your debts each month. It also helps to avoid late payments, if they have been an issue for you in the past.
17. 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.
18. 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.
19. Check your credit score.
Take a minute or two to check up on your credit health this year. Try any of these online and mobile resources you can use to check your credit score for free.
Keeping up with your credit score on a regular basis helps give an idea of where you stand as a borrower, which is important when it comes time to apply apply for a new credit card or other loans. It also helps you stay on top of signs of fraud, like unexpected changes to your credit history.
20. Choose one debt to pay down first.
Prioritize your debt by choosing specific debt to tackle first. Here are two ways to do that:
Prioritize the debt with the lowest balance and work to pay it down first — achieving small wins early on will help build the momentum you need to tackle bigger debts.
Prioritize the debt with the highest APR and work to pay it off first — you’ll save money in the long term by attacking the costliest debts first.
Once you’ve chosen your top priority debt, throw everything you have at it while making minimum balances on the rest.
21. Apply for a 0% promo intro APR balance transfer credit card offer.
If you’re working to pay off a substantial amount of credit debt, take a few minutes and apply for a 0% promo intro APR balance transfer credit card . If you get approved, you could avoid paying a high interest rate on some or all of your debts for the promotional 0% period the card offers. Beware: The lender may charge a fee, usually 3-5% of the amount you transfer, for the service.
For example, if you avoid paying interest on a $2,000 debt on a card that charges a 15% APR for 12 months, you avoid paying back nearly $180 in interest charges.
22. Shop for auto loan refinance offers.
Take 10 minutes to see if you can save money on your auto loan this year. Refinance your auto loan on more favorable terms to get your payment under control. You could get a loan with a lower interest rate or a longer loan term to reduce your monthly payment.
23. Call at least one lender to negotiate your interest rate.
If you are stretched paying student loans, an auto loan, or even credit card debt, and have a good track record as a borrower, it may behoove you to call your lender and ask to negotiate a lower interest rate. The longer you carry debt, the more it earns in interest. If you are currently carrying debt month to month, lowering your interest rate may help you get out of debt faster by reducing how much interest you are charged on the remaining balance.
24. If you’re badly behind your debts, call to see if they’ll negotiate.
If any of your debts are outstanding , prioritize eliminating one of them today. You have much more flexibility in paying off long-outstanding debts than you may believe. Few know they can negotiate debts in collections, and by doing so they can save as much as 75% .
Those are significant savings. Set aside half an hour one day soon to call up the collections agency, or any business where you may have debt outstanding, and see if you can negotiate down the amount owed. At the very least, you’ll get the opportunity to work out a payment plan to pay off the debt.
25. Unsubscribe from promotional emails.
If you’re always tempted to follow the links on promotional emails you receive each week from your favorite retailers learn to delete the emails right away or, even better, unsubscribe from them all together.
“The less you look, the less you may click the “purchase” button,” said Rose Swanger , a Knoxville, Tenn.-based financial planner.
26. Download a budgeting app.
If tracking your spending seems a little overwhelming, download an app that will do it for you. You Need a Budget is a longtime favorite for not just tracking spending but aligning your spending with your savings goals; and we recently reviewed the Honeydue app for couples looking for an easy way to track their household spending. If you don’t have a smartphone, many of these services have a web version.
27. Read one personal finance book.
Commit to reading just one book on personal finance this year. Browse your local library, the personal finance section on Amazon, or your local bookstore to find a book that stands out to you. If reading isn’t your thing, you may be able to purchase an audio version to listen to during your commute.
Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki
You Are a Badass at Making Money: Master the Mindset of Wealth by Jen Sincero
Think and Grow Rich by Napoleon Hill
Unshakeable: Your Financial Freedom Playbook by Tony Robbins
The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich by David Bach
Broke Millennial by Erin Lowry (a shameless plug for Erin, who was our former contributors editor)
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