4 Financial New Years Resolutions You Should Consider

William Miller |

When the clock hits midnight and the calendar officially turns over to the new year, there is a lot of optimism. The sense of a fresh start for the next year brings a lot of excitement and many of us use this time as a chance to set our New Year’s resolutions. Having a goal that you work towards can be a great motivator.

Common goals you hear about include going to the gym, eating healthier, or spending more time with your family. 

What about financial goals?

This month I am going to discuss 5 financial resolutions you should consider getting a jumpstart on 2023!

Establish Your Emergency Fund

Having an emergency fund is one of the foundational aspects of personal finance. However, only 44% of Americans could afford an unexpected expense of $1,000. 

An emergency fund amount ranges depending on how you want to calculate your needs. Some people use a fixed amount such as $10,000 and others choose to do pick somewhere between 3-12 months of income. Generally, you want to have no more than 12 months of income because at that point you could grow your brokerage account.

It is also important to have your emergency fund not tied to the market and separate from your everyday bank account.

The national average for an interest rate on a savings account is .22%, meaning for every $10,000 you have in the account you would earn $22/year. Earning interest is great but there are better alternatives you should consider with High Yield Savings Accounts. Some options are:



Annual Interest per $10,000

Capital One



Marcus by Goldman Sachs






A High Yield Savings account’s interest rates are tied to the federal fund rates and can change; however, the accounts are not tied to the market so you will not lose any money.

As you can see the difference between your traditional savings account and a high yield savings account can be dramatic. In the chart above the result was a $308/year difference for not doing anything different!

Establishing your emergency fund and maximizing its potential will help you lay the foundation for your finances.


Reduce Your Debts

Having debt is normal. In fact, the average engineer graduates with their bachelor’s degree with ~$26,000 in debt.

Having that can be an emotional thing and paying it down is important to many people. The key when you are trying to get rid of debt or reducing your current debt is to be strategic in how you are paying it down.


The first option you could do is looking to refinance any loans or high interest debt. By reducing the amount of interest associated with the debt, you will then be reducing the overall cost of the debt. If you have a loan that is 7.5% interest and find an option to refinance the loan to 5% interest, you would save ~$250 per $10,000 associated with the loan.

Increase Payment Frequency

This strategy is often under looked, however, if you are unable to overpay or refinance your loans it is a strategy that can save you money in the long run. You can increase the frequency in which you make payments towards the loan. Since most loans accrue interest daily, making payments more often will reduce the amount of interest because you are paying down the balance. 

Let’s look a loan of $50,000 at 8% and will be paid off in 10 years and how monthly vs. semi-monthly payments would look.

Loan Payment

Payment Amount

Total Interest Paid

Total Loan Amount









Yes, in this example you would have saved only ~$79 but you did not change your monthly payment amount at all. This savings would only increase if you were able to make extra payments each month or just pay more than the minimum.

Increase Your Investment Savings

The rule of thumb is to save at least 15% of your income per year, for an engineer making $100,000 that would be $15,000. This savings number does include any employer match you may have on your retirement plan, so the actual dollar amount that you would be saving would be lower.

Early in your career when you have student loans or are trying to save for a down payment on a house, saving 15% of you income may not be feasible. Beginning to save with your employer match is a start, and if you can do more that’s great. Each year you should have the goal to increase your savings.

For example, you start your career at Lockheed Martin making $75,000 and their 401(k) plan offers a 50% match up to 8%. This means if you start by putting 8% of your income into the 401(k), they will put 4% of your income into the account as a match. For the year you would have saved $9,000 or 12% of your income (8% from your contribution and 4% from Lockheed). Already you are close to the goal of at least 15%.

Each year you could save a little more into the 401(k) or other investments accounts.

Have A Fun Goal

The last financial goal that you should have should be something that makes you happy or excited. Perhaps the goal would be a new TV or going on a dream vacation.

Your finances are personal and what brings you happiness is important. Have a goal that motivates you or something that excites you makes the likelihood of you achieving the goal much higher.

One thing that you could do is set aside a certain dollar amount per month that is geared for this “fun” goal. Once you reach the amount needed for whatever it is you can then go out and purchase it.

Final Thoughts

Having goals is a great thing and is one of the reasons that New Years is so exciting! There are many things you can do to make improvements to you finances this year including:

  • Establishing an emergency Fund
  • Reducing your debts
  • Increasing your savings
  • Having a fun goal

As always, keep planning personal and don’t leave the IRS a tip in the process.