New Year’s resolutions have a long history, but not everyone feels the need to dedicate time to changing habits or improving their life in other ways at the end of each year. If you are on the resolution bandwagon, you are far from alone. More than 45% of all adults in the United States resolve to change something in the upcoming year, and some of the most common commitments are to financial well-being. Some decide to spend less and fatten up their savings, while others create goals for major purchases like buying a house. Paying off debt falls into one of the most frequently cited resolutions, too.
While decisions present a clear opportunity for change, not everyone meets their goals with ease. In fact, only 8% deem themselves successful in reaching a New Year’s resolution by the end of the year. If you’re concerned with how you might live up to your financial resolutions for this year, consider these helpful tips.
Get to know Your Why
The first step to meeting the financial goals you’ve set for yourself in the upcoming year is having a strong understanding of why you’re trying to achieve them. It’s great if Betsy down the street is trying to pay off her mortgage, or Tom at the office wants to start investing in the stock market, but your goals should be unique to your bigger picture.
Putting more in your emergency fund by spending less throughout each month may allow you to avoid debt, like short-term loans or high-interest credit cards when a big expense comes up; similarly, working toward paying off your credit card balance means you’ll have more to use for travel or retirement savings. Knowing the why behind your resolution is one part of the process that allows you to stick with it throughout the year.
Achieving your financial resolutions often comes down to willpower, but did you know you have a reliable partner in the process? Automating financial activity – from paying down debt to saving for a rainy day – is one of the easiest moves you can make toward changing your financial life. Nearly all financial institutions give you the ability to set up automatic transfers from a checking account into a savings account, and others even provide a way for you to direct deposit funds into savings from your paycheck.
Employers who offer a retirement plan give you the chance to set up automatic contributions each pay period, making saving for the long-term a breeze. If you’re working on paying down debt, most lenders give you the opportunity to establish automatic payments either for the minimum amount due or a little extra. Whatever you’re working toward this year, setting your goals on autopilot is a helpful practice.
Make them Realistic
Another lynchpin in meeting your financial resolutions is knowing you can indeed accomplish what you’ve set out to do. That starts with being realistic about what you can feasibly set aside for savings, retirement, debt, or investing by taking a close look at your cash flow. No one wants to spend time budgeting out every last penny of their paycheck, but doing so gives you an opportunity to uncover overspending or gaps in your plan. Once you have a solid idea of what you’re able to use for your financial resolutions, set your sights on achievements that are within your reach – and your budget.
Get a Partner in Crime
The final tool to being successful in the new year is finding an accountability partner. Whether they hold your hand when you fall off the resolution path, or they give you a slight (or hard) nudge to motivate you, having someone who understands why you’re trying to achieve something different can be a lifesaver. Friends, family, and co-workers can be great accountability partners, but don’t forget you have professional options, too.
Financial New Year’s resolutions are no different than resolving to lose weight or spend more time with your family. They take a heavy dose of commitment from the start, and even more clarity as to why you’ve added them to your big to-do list. Adding in these tools will help you stick with your financial resolutions, no matter how big or small they may be.
Featured photo credit: money/https://pixabay.com/en/money-dollars-success-business-1428594 via pixabay.com