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Budgeting

5 Financial Resolutions You Should Make

Save more, spend less, pay off debt, create a budget and establish long-term goals in 2014 with the help of tried-and-true Kiplinger advice.

You probably won't be crafting a budget or plotting your 2014 money goals on New Year's Eve. But if you're like the majority of Americans, you will resolve to improve your finances in the New Year -- and we can help. A record 54% of Americans say they will make financial resolutions for 2014, according to the Fidelity New Year Financial Resolutions Study. When Fidelity first conducted its annual study in 2009, only 35% of respondents said they typically consider financial resolutions.

Below are the top financial resolutions, according to the Fidelity study. All are worth setting as your own goals for 2014. Along with each resolution is tried-and-true Kiplinger advice to help you achieve that goal.

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1. Save more. With 54% of the Fidelity survey respondents indicating that they want to save more money, this is by far the top financial resolution for 2014. It's no surprise considering that the personal savings rate in the U.S. is just 4.9% of disposable income, down from a high of 14.6% in 1975. Your first savings goal should be to build an emergency fund that can be tapped in the event of an illness, job loss or unexpected calamity (see 7 Strategies to Build an Emergency Fund). Once your emergency fund is well under way, you can divert small amounts toward other goals, such as increasing your nest egg, buying a home or paying for college. These six strategies can help you save more, no matter your income. See Where to Keep Your Savings Now for the best places to earn a decent return on your money.

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2. Pay off debt. About one-quarter of the Fidelity respondents listed this as their top resolution. However, anyone with high-interest credit-card debt should make paying it off a priority. That's because the return will likely be greater than what you would get with most investments. For example, it would take 28 years and cost $10,663 in interest to pay off the average household credit card balance of $7,050 with just minimum monthly payments. But boosting the monthly payment to $250 would wipe out that debt in three years and save about $9,000 in interest. See Escape the Debt Trap for strategies to chip away at what you owe.

3. Spend less. This resolution ranked third in the Fidelity study. But it goes hand-in-hand with the top two resolutions on the Fidelity list. That fact is, it's tough to save more and pay off debt if you don't reign in spending. To do so, you need to track where the money goes every month. Try to zero in on nonessential areas where you can cut back. For help, see our list of 28 common ways people waste money. If any of them sound familiar, cut those unnecessary expenses so you can keep more money in your pocket.

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4. Develop a long-term plan. Long-term financial goals can take a backseat to the present-day demands on your money, often making it difficult to even set such goals. However, if you don't take the time to, say, figure out how much you need to save to live comfortably in retirement, you might find yourself without enough cash to cover the bills when you're no longer working. For help, see How to Set Financial Goals. And take our Are You Saving Enough for Retirement? quiz to see if you're on track and what steps you can take to reach your goal.

5. Make and stick to a budget. Although budgeting was among the top five resolutions in the Fidelity survey, only 12% of respondents indicated that it was their top financial goal for 2014. Perhaps it's because many think of a budget as a straitjacket that limits spending and takes the joy out of life. In reality, it can set you free. When you have a plan, know how much money you have and where it's going, you don't have to worry about it. Here are our favorite budgeting sites that can you help you stay in control of your money and our own household budget worksheet.

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