The start of the new year is a great time to reassess your financial situation, make a plan for saving in the future, and put that plan into action early in the year! Although the new year’s resolution approach to financial planning can seem like a great accountabilty tool, it is also important to make resolutions that are attainable with your current financial standing. Here are a few tips to help you create those attainable goals so they don’t become 2022 resolutions by the end of month one:
- If paying off debt is a top item on your financial list, be sure that you are not setting unrealistic goals for yourself right off the bat. Take a look at your current income and compare it with your living expenses; what amount do you have left? Although you might want to put ALL of that towards debt, realistically other expenses will come up. Choose a manageable amount from your surplus and have that be your monthly or quarterly goal for paying off those debts.
- Re-focus at the end of each month. Set an alarm on your phone for the last few days of each month to check your saving and spending of each month. constantly checking in with your progress and revisiting your goals will keep them fresh in your mind even as the new year becomes the middle of the year.
- When tracking your spending, you can physically write down your spending and saving, or if you prefer an app as a tracking tool, PocketSmith might be an option for you. this app can track your current financial status, spending, saving, and even help you set more manageable goals if you are struggling.
- Similar to choosing an amount to put towards debt, give yourself a monthly allowance of “fun money” that you can spend on items or activities that you want but don’t need. If you don’t use all of your “fun money” one month, put the extra towards debt or reoccuring costs. If you overspend one month, take that amount out of next month’s “fun money” to stay on track with your spending.
- Build your credit by only spending what you know you can pay off on your credit card. knowing your spending limit in your bank account can insure that you are able to pay back most if not all of your monthly acruence, instead of just the minimum monthly payment. If you have a habit of overspending using a credit card, consider carrying cash on to train yourself to only spend the money you know you have. Once you get the hang of that, set yourself that same limit when using your credit card.
- Getting off track happens, but it’s no reason to give up on your goals. Awknowledge that you do not stick to your intended plan for whatever reason – unavoidable or accidental – and adjust your plan accordingly to make up for the detour. Do not let all your hard work to this point be forgotten. You stuck to your plan as long as you could but maybe it’s time to reassess; how can you get back on schedule, or what needs to change to make your goals more manageable?
Everyone’s financial goals may look a little different, so it might be worth it to look into some other sources to give you a starting point that works for you. With these tips to start, hopefully you can look into 2021 and create a financial resolution that you can hold yourself accountable to and one that you can maintain in the long run. Happy New Year’s Resolutions!