New Year, New Budget? Creating Realistic Financial Resolutions
Posted by Kya Thompson
on January 10, 2018
Happy New Year! If you made some financial mistakes last year, don’t worry, now is a great time to reflect and think of some realistic resolutions to have a successful year this time around.
Recognize bad habits
Before you start rattling off a list of things you want to accomplish this year or resolutions you hope to tackle, take some time to reflect on what you did and didn’t do last year. Where did you get yourself into trouble financially? Online shopping? Missed payments on bills, credit cards, or personal loans? Did you spend too much money and neglect to put money aside for an emergency fund or retirement savings? You may possess one or all of these bad habits, so it’s important to address and hold yourself accountable for tendencies that may be holding you back financially.
Set specific and realistic goals
So you’ve identified your bad habits, which one got you into hot (financial) water last year? Think about the disappointment, frustration, uncertainty, or embarrassment that it caused. Set a goal specific enough to prevent it from happening again. It’s not enough to say, “I’m going to save more money this year”. You need to determine the how. How are you going to save that money, or where you’re going to cut spending to save? How much money do you want to save? Having a precise goal in mind will improve your chances of reaching it. Now, before you set too many new resolutions, think about what you did well last year. You might have paid off a credit card or contributed a sizable amount to your outstanding student loan balance. Did you cancel any subscriptions or paid services that saved you money? Big or small, these are financial victories so pat yourself on the back. Keep these positive thoughts in mind and make it a point to keep up these good habits.
Check in with yourself
The most important thing to do after setting a specific and attainable goal is to monitor how you’re progressing towards accomplishing that goal. If you planned to save money or pay off debt, check in every three months to see where you are in relation to that goal. Find a way to measure your progress by determining what actions can help you achieve your goal. For a shopaholic, this could be recycling outfits from years prior, or not buying the latest and greatest iPhone. What’s important is that you don’t forget your goals once you’ve set them. It can be easy to drop your resolutions early in the year, so write them down or set reminders three, six, and nine months in advance to keep yourself on track. In the words of Antoine de Saint-Exupéry, “A goal without a plan is just a wish”, so take some time to come up with a meaningful resolution that you can embrace all year long. Once you identify what you want to change or improve, set a specific enough goal to address it. From there, plot your milestones and check in with yourself to make sure you’re still on the right path.
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