Meat Loaf dies at 74 Intel's $100B chip 'megafab' Twitter will showcase your NFTs Netflix confirms Squid Game season 2 Free COVID-19 test kits Wordle tips

5 New Year's financial resolutions you can keep

Creating a better relationship with money doesn't have to require setting rigid goals.

breaking-the-piggy-bank-stimulus-check-cash-money-savings-debt-personal-finance-021
Sarah Tew/CNET

New Year's Day is right around the corner, and that often means setting new goals -- including with your personal finances. But we sometimes make New Year's resolutions that are overly ambitious, or we focus on goals we aren't really invested in, which can lead to quick disappointment. 

Instead, try concentrating on financial resolutions that are both within your reach and top priorities. We'll help you draw up a few mindset-changing resolutions that can help put you on track to achieve your financial objectives in 2022. 

1. Set a starting point

Before you can begin saving more, spending less and creating a budget, figure out what your financial picture is. Take a look back at the past year to review your cash flow and your highs and lows. That's the first step to making a comprehensive -- and realistic -- effort toward achieving your financial goals.

You don't have to get specific (ballpark numbers are fine), but it's helpful to consider what you hope to accomplish financially in the next year or two. For instance, is buying a house at the top of the list? Maybe finally taking a vacation after nearly two years is a priority. One of your kids might be driving soon or preparing to leave for college. Reviewing what you need to save for is useful as you start to prep your financial blueprint. 

2. Prioritize wellness 

Financial stress weighed on many of us during 2021. In a recent study of 19,000 Americans, 60% of respondents indicated feeling anxiety over personal finances. And it's a vicious cycle: Clinical psychologist Dr. Joy Lere, the cofounder of behavioral finance platform Shaping Wealth, says, "When someone is struggling psychologically it can be damaging to their ability to connect to the confidence, creativity and agency that are crucial aspects of building wealth. Mental health concerns can interfere with an individual's ability to work and function at his/her/their occupational peak, which has an adverse impact on income generation."

There are many ways you can focus on managing your stressors in the new year -- such as establishing boundaries, communicating more openly and making sure you take time to recharge. And, take advantage of employer- or community-based wellness resources for physical, mental or financial health.

3. Pay yourself first

"Pay yourself first" means rewarding your future self by contributing to retirement funds, emergency funds, saving accounts and investments automatically, each time you get paid. If you don't pay yourself first, you run the risk of not paying yourself at all. 

Many employer-funded retirement plans like 401ks and IRAs allow you to contribute pre-tax dollars from your check each pay period. For other savings and investing accounts, you can often set up rules in your bank account to divert money each time you're paid. This way, your paycheck will reflect an amount after taking care of your savings goals. It's also easy to update the amount you're saving if your income or personal situation changes. 

This method could help you save big in the long run. For example, creating an emergency fund can offer you a cushion if you lose your job, experience a salary cut or have emergency medical expenses. 

4. Plan for unexpected expenses

Life is full of surprises we can't always prepare for, which has been clear throughout the pandemic. We also saw a large number of climate change disasters in 2021. It's worthwhile to review your current insurance policies to make sure your home, car and other belongings are financially protected in the event of a disaster. Creating a will and planning your estate to protect your loved ones is also important.

As mentioned above, an emergency fund can also be a valuable endeavor. There's no set formula to build an emergency fund -- people's needs and risks are different -- but there are some common quandaries. For example, how do you balance building an emergency fund while repaying debt? 

Susie Moore, life coach and author of Let It Be Easy, advises, "If the interest rate (or balance) on debt owed is high, then you should really focus on paying that debt down, while still building an emergency fund, albeit smaller. If the interest rate (or balance) is relatively low, then having a bigger emergency fund runway will allow you to make more pragmatic decisions in the event of an emergency." 

5. Revisit your goals frequently

Make sure that your financial goals remain relevant to your current circumstances, and revise your goals when needed. For instance, if your salary changes, you lose your job or start a family, your priorities are going to shift, and your goals should reflect these new considerations. Give your budgets, investments and savings a double-check to make sure you're in a good position to achieve your new goals, and adjust accordingly.