Our previous New Year’s resolutions survey uncovered a surprising fact: People were more likely to regret not doing something (like not saving enough or not paying down debts) than committing mistakes (such as making an unaffordable purchase or spending frivolously).
In other words, people regretted not being more mindful and proactive with their money. Instead of making intentional decisions based on their financial priorities, their money management was impulsive and reactive.
Sound like you? Here are some ways you can be more proactive with your money management in the new year.
1. Stop living paycheck to paycheck
Paycheck-to-paycheck living is the definition of reactive money management. Each dollar you make is spent each month, and you never have any money left over. You’re simply sprinting to keep up with the next expense, and never getting ahead.
It’s also exhausting. With so much of your money and mental energy spent on just paying your bills, you have no resources left over to better your financial situation.
Getting out of the paycheck-to-paycheck cycle will be key to creating a more proactive approach to your finances — but you won’t do it all at once.
Start with small goals, like having $10 left over each week or an extra $50 a month. Look for ways to cut your spending and grow your income. As you build a buffer between what you make and what you owe, you can afford to be proactive with your money.
2. Save an emergency fund
An emergency fund is another essential ingredient to proactive money management. Among people who fail to keep a financial resolution, 73% say they were sidetracked by an unexpected emergency expense or hardship, according to a Fidelity Investments survey.
Whether it’s a medical bill or unemployment, these unexpected situations can derail your efforts and wipe out the progress you’ve made in one fell swoop.
But just because these emergency situations are unexpected doesn’t mean you can’t plan for them. Building an emergency fund will give you the security to quickly recover from unplanned expenses or setbacks.
3. Pay attention to money patterns
If you want to know where to start being more proactive with your finances, look at the money patterns you’ve established. These are the responses or habits you default to when managing your money.
Hopefully, some of them are healthy behaviors that help your finances, but there are probably some patterns that are hurting you.
Maybe you have a habit of taking your credit card out for a spin when you’re stressed. Perhaps you’re frugal to a fault and never feel like you can enjoy your money.
Knowing what’s caused problems in the past will help you find effective solutions for your situation. If you identify your patterns, you can work to change them and create healthier habits.
4. Be mindful with your money
Mindfulness is about cultivating a practice of paying attention to your internal state in the moment, and noticing how that affects your decisions and behavior. This attentiveness to your motivations and thoughts can be a powerful tool to start making money changes.
If you’re mindful with your money, it means that you are looking inward whenever you’re handling your finances. Instead of thoughtlessly spending on a night out with friends, you might keep a tally of your spending so far and make sure it’s aligned with your budget.
If you’re feeling overwhelmed and discouraged by your debt, you might notice that and pull up your debt-tracking spreadsheet more often to remind yourself of the progress you’ve made so far.
Practice paying more attention to your thoughts and feelings around money. As you’re more mindful, you can make simple, in-the-moment course corrections that will keep you on the right track toward your financial goals.
5. Plan your financial future
As you work on your financial habits, setting financial priorities will help you make the most efficient decisions. Instead of trying to do everything at once and spreading yourself too thin, focus your efforts and make progress toward your most urgent goals.
First, identify your top financial priorities. What would your finances need to look like for you to live your ideal life? Find the financial priority that aligns best with your values, responsibilities, and other non-financial dreams and goals.
Once you have your top financial priority, you’ll have a guiding rule for your money management. Instead of just reacting to each money choice individually, you can put it in the greater context of your financial world. You can make sure that each dollar is used to most effectively make progress toward your most important money goal.
No matter where you’re starting from, you can make significant improvements to your financial situation. Learn more about managing your money with these seven ideas to clean up your finances for the coming year.
Interested in refinancing student loans?Here are the top 6 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
|1.89% – 6.66%1||Undergrad & Graduate|
|1.89% – 5.90%2||Undergrad & Graduate|
|2.25% – 6.09%3||Undergrad & Graduate|
|1.99% – 5.34%4||Undergrad & Graduate|
|1.97% – 8.54%5||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|Check out the testimonials and our in-depth reviews! |
1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of October 1, 2020.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of September 9, 2020. Information and rates are subject to change without notice.
3 Important Disclosures for SoFi.
4 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 2.98% APR (with Auto Pay) to 5.49% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.34% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of October 26, 2020, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 10/26/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
5 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 11/13/2020 student loan refinancing rates range from 1.97% to 8.54% Variable APR with AutoPay and 2.95% to 8.77% Fixed APR with AutoPay.