How to Stick to Your Financial New Year’s Resolution

A New Year’s resolution is a goal you want to reach in the upcoming months, hopefully within the year. It’s a positive way to start a new year! Most resolutions start strong and fizzle out as life throws its curveballs. If you have financial goals you want to accomplish this year, here are some tips on how to stick to your New Year’s resolution.

Examples Of Financial New Year’s Resolutions

Financial New Year’s resolutions could be:

  • Buying a house
  • Building an emergency fund of 3x your monthly salary
  • Paying down debt, specifically student or auto loans
  • Invest more money

1. Make Specific & Realistic Goals

Avoid making a broad resolution like “pay down debt” or “save money.” That only sets you up mentally for unrealistic expectations and allows for doubt to set in. A resolution is supposed to be positive, so you need to keep it positive. When creating a resolution, consider narrowing the resolution or making sub-goals.

2. Outline A Plan

If your resolution is to “pay down debt,” you need a plan to pay down that debt. The best way to tackle debt is to follow the snowball or avalanche method.

If you want to buy a house, start by setting money aside for a down payment. Plus, you can start looking at houses that might be in your price range and create realistic expectations on how much “house” you can afford.

If you need to build your emergency fund, look at savings certificates offered at financial institutions to earn higher interest on your money.

Any resolution is possible as long as you set off with a plan in mind!

3. Start Small

Everything is more manageable when you break it up into smaller bits. Instead of looking at the goal of saving $5,000 this year, try to focus on the first week. To reach your goal, you need to save approximately $96 a week. If you get paid weekly, try having this amount automatically transferred into a savings account. Saving $96 a week seems more doable than saving $5,000 in a year.

Yet, life happens. If a wrench comes and makes a muck of your financial plans, move the goalposts. Celebrate the accomplishments you make along the way. You may not be able to save $5,000 in one year, but maybe you can save $2,000. That is still money in your pocket that you did not have before!

4. Stick To A Budget

Every financial plan starts with a budget. A well-planned budget that adjusts on a month-to-month basis, helps you manage and allocate money to specific things, like your savings. When you create your budget, see how your resolution fits. If it’s tight, consider looking for ways to cut in other areas, or adjust your resolution to be something doable.

To stick to your resolution, you need to check your budget periodically. By checking your budget, you can physically see if you are overspending or unable to reach your resolution’s goal that month.

5. Tell A Friend

You do not have to tell everyone your business, but you should share it with at least one friend. You don’t have to give specifics; just give them your generalized resolution. For example, you can tell them you are going to build an emergency fund. You do not have to tell them the amount you want to save. This way, they can check-in and ask you how that goal is progressing. Having someone check in on you, will help motivate you to stick to it and give you someone to get excited with you when you meet your goal!

Happy New Year! Hopefully, these tips help you stick with your resolution and put you in a better financial position. If you need help achieving your goals, visit your local credit union. They have staff who are ready to help.