Make Change Staff
Every year about 40 percent of us faithfully make a New Year’s resolution. According to Statistic Brain, money-related resolutions are the second-most common, after self-improvement.
But try as we might, most of us are going to fail. The first week, most resolution-makers stick to it, but by month one that number falls to 58 percent. By six months only 45 percent are keeping it up. That lackluster success rate may seem like reason enough to give up right now, but maybe the problem isn’t the act of making a New Year’s resolution. Maybe it’s the kind of resolutions we make. Generic resolutions like “eat healthier” or “make a budget,” are hard to stick to—goals should be personal and specific.
That’s why this year you won’t find any of the usual money resolutions among the Make Change staff’s personal finance goals. We’ve dug deep and found some resolutions that fit into who we are right now (and where we want to be going into 2019). Hopefully, by getting personal with our money goals—and sticking to a concrete plan—we’ll beat the statistics and make it to January 2019 financially savvier.
A recent survey found that eight in 10 female investors have encountered stereotypes about their investing expertise—like the perception that they are too afraid to take risks and clueless about household finances. It’s not only men who believe these labels. Women, too, often characterize themselves as being the weaker sex when it comes to money management. I am no exception.
My homegrown personal finance education focused on the importance of budgeting and saving. In high school, I learned to put $20 of each paycheck into a savings account before doing any spending. As my salaries increased, so did the amount I’d put away. While I quickly learned that savings accounts are not the way to grow wealth (especially if you want outpace inflation), I did not feel knowledgeable enough to start making my own investments.
In this age of technology and information, the good and bad news is that there are endless investment options based on financial goals—many of which do not require extensive experience with the stock market. Mutual funds, for instance, allow you to maintain a diversified portfolio based on goals and timelines that you set, without hand-picking your stocks. These funds are managed—either passively or actively—depending on your needs. In fact, on the whole, low-fee index funds, including ETFs, will soon overtake stock pickers.
That means there’s no excuse not to start somewhere. Even if it’s taking 25 percent of the funds in my savings account and putting it somewhere else, my resolution this year is to make my money work for me, instead of for my bank. —Liz Biscevic
Spend more with socially conscious companies, less with everyone else
I think most of us want to do good things with our money. If I’m going to have to spend them, I’d like my dollars to go to a company that treats its employees fairly, gives back, and keeps the earth happy. And I try, I really do. But here’s the thing: I’m also a busy person. Sometimes I just don’t have the time to make sure I’m buying the good T-shirts and not just the ones with the best sale, fastest shipping, or closest retail location. Thanks to one-click shipping, voice-activated ordering, and dash buttons, thoughtfulness is being taken out of the shopping equation, which means we have to make even more of a conscious effort to buy wisely.
In 2017, I spent about 20 percent of my disposable income with companies I feel good about supporting. But 2018 is going to be different. My goal is to know where my stuff is coming from (and who is selling it) 75 percent of the time—because hey, I’m a realist. To get there, I’m devoting the first few weeks of the year to researching retailers and goods (suggestions welcome) and finding who does the most without breaking my budget. —Angela Colley
Go second-hand or swap, don’t shop
In 2016, I wrote a New Year’s resolution for the fashion industry: to solve its serious environmental problems. And the topic has only become more urgent in my eyes. Synthetic fabric is contributing to the microplastics clogging our waterways, and the resources and pollution used to create even natural fabrics are casting a menacing ecological shadow. A year ago, I joked that if Big Fashion couldn’t get its act together we’d all have to become nudists to save the planet.
But there is another way, and it’s almost as cheap (especially if you factor in all the sunscreen perpetually naked bodies need). I’m talking about second-hand clothes.
I used to frequent thrift stores in high school and college, but with the boom of fast fashion available at local big box stores, and the rise of flash sales and speedy online delivery, pawing through musty resale racks grew less and less appealing.
And yet, for the past several years, I’ve participated in massive clothing swaps, where dozens of women bring their unwanted clothes to exchange. These days, most “new” items in my closet, from formalwear to ballet flats, have come from those friendly and fun-filled events.
Perhaps buoyed by my swapping success—or just a general need to cut costs with a fast-growing toddler in the house—I also joined Facebook groups for local moms to swap or resell kids’ clothing, toys, and furniture, where many items are like-new and for sale at prices even bargain brands can’t touch.
Now I’m low-key obsessed with bringing this idea to other areas as well. Useless kitchen gadget swap, anyone? Message me on NextDoor if you want to join the neighborhood garden tool lending club!
And my interest in second-hand stuff has come full circle—I’m vowing to make thrift stores or online resale sites my next stop if I can’t find the item I need through swaps. The savings, from both financial and environmental standpoints, are just too good to pass up. —Callie Enlow
Build a pet emergency fund
Before I got my first dog as an adult, I did all the research. According to ASPCA estimates, having a medium-large dog would cost me anywhere from $1,214 and $1,448 per year. That was completely doable, so I adopted a very hyper, very affectionate pit bull. In the first year, she crawled into an open container of dog food and ate twice her weight, to the vet we went. She swallowed a button, to the vet we went. She developed an allergy to the five-star, human-grade food I bought her, to the vet we went. And then as she got older, she started having more health issues and it took three surgeries—at $3,500 a pop—to get her well again. In the eight years I’ve had her, she’s almost doubled the ASPCA cost estimates.
And just last year I fostered another very hyper, very affectionate pit bull, and I truly believed this time would be different. I was wiser. This time I would stay under $1,300 per year. But two months after adopting him, he suddenly stopped breathing. After an overnight stay in the emergency vet hospital, I was over my yearly allotment for dog expenses with 10 months to go.
When it comes to pets, my two crazy dogs are proof positive that you have to expect anything. So, this year, I’m going to be ready for it with an emergency fund just for them, rather than draining my own emergency fund with every pet emergency and then worrying I’ll have one myself. My immediate goal is to save $1,000 for the puppers in the next six months through monthly installments, and then see if I can double that fund during the second half of 2018. —Angela Colley