Financial New Year’s Resolutions

New Year’s resolutions are seldom followed beyond January, but you can set your bank account up for a better year by following the resolutions below.

Focus on big-ticket items

Housing, taxes, health insurance, education, and auto expenses represent the vast majority of the average person’s spending. Rather than focusing on how much you spend on smaller items, focus on the big financial decisions that are likely to be the most meaningful to you and getting them at the best cost possible.  

Inventory your investments, points, and miles

Spend an hour going through each of your bank, brokerage, and credit card accounts. There are services that will show your balances in real time such as Award Wallet and Mint, but I find that this process forces you to think about each of your accounts and how it fits into your larger financial picture. If you have superfluous bank accounts you don’t use, close them. Check each of your brokerage accounts to make sure that the investments held within them fit with your larger asset allocation. Sometimes you will even forget you have a few dollars here and there that add up.

Go through each of your credit card and airline/hotel accounts so that you have a complete picture of how many points and miles you have in different programs. You may discover you have more points than you thought or get a better understanding of where you can transfer in points to get a good reward redemption.

Plan on applying to 4 credit cards

There is a widespread misconception that you shouldn’t have too many credit cards as it will lower your credit score even though only 10% of your score is based on new credit. My wife and I each usually apply to at least 4 credit cards a year. We only apply if the sign-up bonus is more than $500 per card so we generate $2,000 each or $4,000 a year on sign-up bonuses alone.

There are really only two reasons not to sign-up for this many cards. One, you are not interested in paying attention to each card and making sure you hit the minimum spend. As the total effort involved here is really minimal, this shouldn’t be an issue. Two, you may want to stay under Chase’s 5/24 rule which says you will not be approved for a Chase card if you have opened 5 or more cards in the last 24 months. Chase has since amended the rule so it is not as firm as a rule as it was in the past. Business cards don’t count towards the total. Also although Chase cards are great, you will generate more total income/points over time by ignoring it and maximizing your bonuses.

Consider applying for the Chase Sapphire Reserve or Preferred card, which both offer some of the best value relative to their annual fees.

Delete subscriptions you don’t use

We all have recurring subscriptions we forget about or don’t use often enough to justify their value. Inventory your subscriptions and shut down the ones you don’t use. Also check The Deal List to see if there is a way to get the same subscription at a discount.

Upgrade your bank and brokerage accounts

You can easily make $3,000 to $5,000 a year through bank and or brokerage bonuses. I have written primers on bank or brokerage bonuses that give you detailed information on how to get started making money on both. Doctor of Credit also has a great list of the best current bank or brokerage bonuses.