3 Great New Year's Resolutions for 2015

By Markets Fool.com

What is your New Year's resolution for 2015? Are you among the millions of people who plan to finally drop those extra pounds? Maybe you intend to finally quit smoking, go back to school, or get a promotion at work.

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These are all great goals, but not enough people resolve to get their finances in order. In fact, only one of the 10 most common New Year's resolutions has anything to do with money, and it's simply to "spend less and save more." With that in mind, here are three specific money-related resolutions that can help 2015 be one of your best years yet.

Save more, but do it right
If you haven't done so already, make 2015 the year you finally start saving for retirement. And if you have started, try to save a little more.

Source: 401kcalculator.org via flickr.

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If you have a 401(k) plan at work, the IRS allows you to contribute up to $18,000 in 2015 ($24,000 if you're over 50), so bump up your contributions even beyond the amount your employer will match. You don't need to do it all at once. Try increasing your contribution by 1% of your pay this year, then another 1% in each subsequent year. You probably won't be able to tell the difference and you'll be glad you did it.

If you don't have a 401(k), or simply want a little more control over your retirement investments, consider opening an IRA. These come in two varieties (traditional or Roth), with the main difference being when your contributions are taxed -- now, or after you retire. With both account types, you can contribute up to $5,500 per year ($6,500 if over 50), and unlike a 401(k) you can invest in pretty much any stocks, bonds, or funds you choose.

Maximize your credit score
FICO credit scores are the most common type used by lenders, and the scoring scale ranges from 300 to 850. While a perfect 850 isn't practical or necessary to achieve, maximizing your credit score can truly help your financial well-being, so a great New Year's resolution is to focus on improving your credit.

Your credit score is made up of five categories of information: payment history, amounts owed, length of credit history, types of credit, and new credit. While your payment history is pretty self-explanatory, there are some "tricks" to boost your score in the other four areas.

For example, "amounts owed" does not refer to the actual dollar amounts you owe, but rather how much you owe on your credit cards relative to your limits and how much you owe on loans relative to your original balance. If you focus on paying a little extra on your accounts each month, you could see tremendous improvement in this category that makes up 30% of your score.

Another area many people don't take full advantage of is "types of credit used." In order to maximize your score, lenders want to see that you use a variety of credit accounts and that you can handle them responsibly. If you maintain a perfect payment history with your credit cards but have no loan accounts whatsoever, you might actuallyhurt your score. Conversely, having loans butno credit cards could also be a negative factor.

The categories "length of credit history" and "new credit" can be improved by simply letting your current accounts age, while not opening any new credit unless absolutely necessary. One main factor considered in setting the FICO score is the average age of your accounts, and new credit accounts reduce this average considerably.

Finally, it's a good idea to monitor your progress, so make sure you are looking at your actual FICO score, which you can buy at myFICO.com, or you can get it for free if you have certain Discover credit cards.

Cut your extra expenses
How much money do you spend that you should be saving? One great goal for the new year is to identify areas where you are spending too much money and get them under control.

Source: 401kcalculator.org via flickr

For example, by eating out one less time per week, a married couple could save $1,000 over the course of a year. By dropping that pack-a-day smoking habit, you could save $2,000 or more in per year, and greatly improve your health in the process.

There are many ways to cut down on expenses, and here is a list of 15 common things people waste their money on. How many of them apply to you?

Set yourself up for success
According to research by the University of Scranton, only 8% of people are successful in achieving their New Year's resolution each year. However, those who make specific and clear resolutions are 10 times more likely to succeed.

In other words, instead of saying "I'm going to save more money," say "I'm going to contribute $100 per paycheck to an IRA." Instead of "I'm going to manage my debt better," say "I'm going to pay twice the minimum payment on my credit cards each month."

If you set clearly defined goals, you'll greatly improve your chances of success. So figure out which financial New Year's resolution would help you the most and come up with an action plan to get it done.

The article 3 Great New Year's Resolutions for 2015 originally appeared on Fool.com.

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