Did you set a New Year’s resolution? How’s it going for you so far?
If you have already fallen off the bandwagon, you’re not alone. In fact, 80 percent of New Year’s resolution fail by February.
But, what if there was a way to revive your resolve and recommit to your financial goals in a way that increased your chances of success? What if we told you that we had a few ways to help you achieve your money goals?
You’re in luck. Keep reading to learn our top seven tips for creating a brand new financial blueprint for the rest of your year.
Make Sure Your Resolutions Are Personal To You
Sometimes we choose certain financial resolutions simply because they look good on paper. But it’s hard to have ownership over your goals if you aren’t personally motivated by them. So, before you recommit to your financial resolutions, first double check that they make sense for you and that they reflect the needs of your future self.
In other words, revisit your “why.” Do you want to have enough money for a downpayment on your first home in eight years? Do you want to save money to create a work optional lifestyle for yourself 10 years down the road?
If you find that you need to get rid of some of your original resolutions, that’s okay. The point is: Be true to yourself during this process of introspection.
Choose Monthly Resolutions Instead of Annual Ones
Trying to do too much all at once is a common reason why so many New Year’s resolutions fail. Instead, focusing on small wins month to month makes it easier to stick to your plan. This way you’ll also gain the motivation you need to keep going and create lasting financial habits.
In addition to setting monthly financial goals, I have also found that creating monthly “financial willpower challenges” has been an effective way to work my way up to accomplishing even bigger goals. Your monthly resolutions could look something like this for the next few months of the year:
- March – cut out unchecked expenses
- April – switch to a new bank
- May – ask for a raise
- June – find a new side hustle
Write Down Your Action Steps
Kumiko Love, an accredited financial counselor and founder of The Budget Mom, says that “a goal will not become a reality until you create action steps on how you’re going to get there.” In other words, you have to plan in order to make your dreams a reality.
Last year, Love’s biggest financial resolution was to get out of debt, and she achieved this in eight short months. Her action steps were as follows:
- Step 1: Pay off student loans
- Highest interest first
- $500 a month using income from side hustle
- Step 2: Tackle car loan next
- $1,000 per month using income side hustle
As a rule of thumb, the more granular the action steps, the more likely you are to follow through on them.
Get Some Better Visual Aids
If tracking your progress with a boring old spreadsheet isn’t getting you fired up about creating better financial habits, then it may be time to try something new. Mint is one of several apps that uses graphs and charts. This helps you see how much money is coming in, how much is being spent and how much goes into savings each week. Once you set specific goals within the app, you can easily see how close you are to your goals – with the touch of a button.
Using a “Debt Free Chart” is another great way to keep your eye on the prize. My husband and I decided to try this approach with a printable chart created by Heidi Ifland Nash. This helped motivate us to save more money for our vacation fund this year. And so far, it’s working well. We pinned the chart to our refrigerator, and each day it serves as a constant reminder that we need to keep our eye on our savings goal. Plus, we actually enjoy coloring in the lines each time we hit a savings milestone. This helps us feel more in control of our financial future.
Build in Some Accountability
One of the best things you can do to stay on track for the remainder of the year is to develop a system of accountability for your goals. This can be done by finding an accountability buddy or creating a rewards system.
“Rewarding yourself is an important part of any financial journey. But remember that it doesn’t have to be expensive in order to be meaningful,” says Love.
A reward can be as simple as treating yourself to lunch on Fridays – if you stuck to your goal of bringing a packed lunch Monday through Thursday.
Take the Guesswork Out of Sticking to Your Financial Resolutions
One of the best ways to build healthy financial habits is to take an “out-of-sight, out-of-mind” approach. In other words, create a system that takes you out of day-to-day decisions about your finances – so that you don’t have to think about them. This method is also known as financial automation. You can’t spend money you never see, which makes automated savings one of the best ways to reach your savings goals year after year.
For instance, Chime has an excellent feature that automates 10% of your paycheck directly into your savings.
Cut Yourself Some Slack
Remember: Even when you recommit to your financial resolutions, setbacks are still likely to happen. They are a part of life and we are only human.
“Once you recognize that habits don’t change overnight, it takes the pressure off of expecting perfect results right out of the gate,” says Alli Rosenblum, founder of FinancialliFocused.com
It took Rosenblum, for example, almost five months to fully break her habit of spending $60 per month on lattes.
So, cut yourself some slack and start changing your habits now. Just think: You too can reach your money goals by hitting the reset button on your financial resolutions!