Frugal New Year Resolutions

It is the start of another year and so it is a great time to get your frugal habits started, re-affirmed or even improved upon. Here is my suggestion for creating and maintaining a frugally focused New Year’s resolution:

1. Define your financial goals.
What are your goals for this particular year? Perhaps to pay off consumer debt, save for a down payment on a house, boost savings and investments, or even get ready leave “work” to become financially free. Now is a perfect time to refocus your thoughts, and create and organize goals for the upcoming year.

2. Develop your strategy.
Building on your goals, make a plan than incorporates a budget for this year, and see where spending should go on your needs (primarily food, clothing, housing and transport), and for your wants (ideally minimize these). Add into this plan how you can perhaps earn more and the steps to do so, and also equally, if not more importantly, how you can save more. Develop a budget that provides, weekly, monthly and a yearly allotment for each of your key categories, so that you can see how you are keeping track with your major goals throughout the year.

3. Track your spending.
OK, now that you have developed your strategy and budget, find an easy way to track this budget. A pen and paper can suffice, although I am currently using Mint.com, which I find particularly effective for this purpose.

4. Check your credit report.
Now is also a great time to check your credit report, which you can get free from AnnualCreditReport.com once a year. Other services such as creditkarma.com, and certain credit cards will also give you monthly scores, for at least some of the credit bureaus. Check for any mistakes that could be otherwise reducing your score.

5. Live more simply.
Living more simply cuts the waste out of your spending, which can allow you to massively boost your saving rates and gain financial independence years earlier. However, the benefits are much greater, as living more simply can potentially lower stress levels and greatly improve mental as well as physical health.

6. Find cheaper hobbies.
How much are your hobbies costing you? Can you find cheaper ones? Meetup.com is a great place to find groups that do such activities for free or cheaply. Many of the free ones involved outdoor activities in fresh air that will likely get you in much better shape, such as walking, hiking, biking (surfing in may case). How about spending time visiting public parks, gardens and museums?

6. Get a raise.
OK this is easier said than done, especially after the global economy has under gone a major recession. However, it may still be worthwhile chatting with your supervisor to see if this is an option.

7. Find another source of income/start your own business.
For many of us, perhaps an easier way to boost our wages is to find a secondary source of income. Can you use some of your skills or hobbies to produce income part time? Perhaps you have a writing or computer skill that you can use to earn some more. One way to get some quick cash is to use the online market place Fiverr.com, or you could start your own blog on one of your favorite subjects.

8. Give to others.
I’m sure you will agree that one of the best feelings in the world is in helping others. Although you may be saving your way to financial freedom, you can still very much find other ways to provide help to others. Volunteering your time can be equally if not a more effective way of being of benefit. As for me, I help teach university students overseas online in my area of expertise, maybe you have a skill that can be provided similarly. If you are super busy perhaps you can give blood, donate some clothes etc, as everything helps!