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Tips for New Year’s financial resolutions

Financial resolutions can begin anytime. If you’re embarking on new year goals or if you’re trying to readjust midyear, use these five ideas to get started.

It can be challenging to think about all the things that you should budget for, from emergencies to car repairs. But the most important thing to do is just to start—even if it’s small and even if it’s one thing at a time. Making financial resolutions either at the new year (or any day of the year) can help you reach more secure ground. For example, you don’t have to save the entire recommended six months of salary in an emergency fund this year. You can make a financial resolution to save just one month of salary over the next 12 months — this helps to break it down into a more manageable number to include in a budget.

The same is true with something long-term, such as saving for a college fund. You don’t have to save the entire amount in one year, and you don’t even have to save for the total cost of a four-year education at all. Instead, set a goal of saving the cost of four years of tuition and fees (about $40,000 for public institutions), and break it down into a monthly total based on your child’s age. For example, if your child is 5 and will need college savings at age 18, you have about 13 years to save approximately $250 per month to reach your goal.

Check out our infographic for inspiration to set and reach your financial resolutions for college, car repair, home maintenance, emergencies and retirement.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. State Farm makes no guarantees of results from use of this information.


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