The problem with New Year’s resolutions is that they’re so hard to keep. That’s especially true for money resolutions. But if you can find a way to keep those resolutions, you’ll not only improve your financial situation, you’ll be more optimistic about the future.
So here are eight ways to make sure you stick to your financial goals in 2017, based on advice from some savvy experts:
Set specific goals. Instead of saying to yourself, “I’m going to pay down my debt in 2017,” pick a credit card with the highest interest rate and focus on paying that one off by the end of 2017. If that’s not possible, aim for paying it down by 50%.
Break giant goals into smaller, more realistic and attainable ones. For example, if you have $20,000 in credit card debt and plan to slash that down to $10,000 by the end of 2017, consider what this really means. It means not only reducing your debt, but not adding new debt. So be honest with yourself and resolve to make resolutions you won’t have to abandon.
Get your family, or at least your significant other, involved. This helps keep you accountable and helps explain why certain household expenses may need to be curtailed.
Make financial resolutions that aren’t about saving more, spending less or reducing debt. “You can also focus on more administrative tasks, like making sure you have the right beneficiaries listed on assets such as your retirement account,” says Ken Hevert, senior vice president of retirement at Fidelity Investments.
Take advantage of resources that can help you make good on your resolutions. For example, “your credit score and credit report are two things you should look at, at least once a year,” said Nancy Bistritz, director of public relations and communications at Equifax.You’re entitled to get a free annual copy of your credit report from the major credit bureaus (Experian, Equifax and TransUnion) by going to AnnualCreditReport.com. “Becoming financially educated about yourself, such as learning what your debt to credit utilization is, can help you better understand where you are financially,” noted Bistritz.
Another tool that can help: an automated alert from your credit card letting you know when you’ve charged, say, $100 or more. “Not only is this a good budgeting exercise, but it can also help with identity theft,” said Bistritz.
Resolve to address the financial problem that’s stressing you out most. Maybe it’s the fear of being able to handle an unexpected emergency or having too much credit card debt.
“Finances are emotional,” Hevert said. “Even making a small dent will make you feel better about your financial health. At a minimum, you should identify goals and then find out where you stand in relation to them so you can then implement steps.”
Take the emotion out of investing. To do this, make saving and investing a habit in 2017 not something you’ll feel guilty about not doing. “The easiest way to do that is to automate it. A platform that automatically rebalances your portfolio based on your retirement goals, for example, can help you from making bad decisions,” said Brian Barnes, CEO of robo-adviser M1 Finance.
Reward yourself for your success. Once you have your finances in order, do something fun like going to Disneyland. You deserve it!
We are now more than a month into 2017 which begs the question: how are your financial New Year’s resolutions coming along? What steps have you taken so far to reduce your debt or save money? Maybe you’ve been so busy that you have yet to make a financial resolution this year. If so, don’t worry! December isn’t the only time for resolutions. It is never too late to resolve to take control of your finances toward a better financial future. According to a NBC News article, the most popular resolution in 2017 was “getting healthy” with specific interests in gyms and fitness (Ref. #1). Don’t forget: financial health is also important! However, if one big financial resolution overwhelms you, it may help to set mini-resolutions that are more achievable and may be easier to keep. Switch them up so they aren’t so daunting. Start now! Trim your debt and get your credit in better shape! Choose at least one of the following tips to create your own mini-resolutions today:
If you haven’t done so in a while, go to annualcreditreport.com to pull your 3 free annual credit reports from Experian, Equifax, and TransUnion. Even if it’s scary, you need to know your credit in order to improve it.
Pay cash for gas each month to keep it off your credit card so your balance will be lower on the next statement. 30% of your FICO credit score is calculated based on “amounts owed” so pay with cash to help keep your balances low and do not use a high percentage of your available credit (Ref. #2).
Use a free app or paper to record every dime you spend so that the money is earmarked when you pay your credit card bill! 35% of your FICO score is calculated based on “payment history” so record and budget to pay ON TIME and in full if possible (Ref. #2).
Go to myfico.com to learn more about how your FICO score is calculated and use that as a guideline to improve your credit.
Try not to eat out for one week. “Brown-bag” it to save money.
Instead of paying for a baby-sitter, swap out watching kids for free with friends.
Negotiate everything; not just houses and cars but hotel rooms and other items. It’s always worth a try.
Don’t just take something at face value. Shop around to compare and find the lowest price before purchasing. For example, it may be cheaper not to bundle insurance. Instead, get separate quotes from an independent agent on auto, home, and life insurance to find the best price for each.
To keep the cost of holidays/birthdays down, give homemade gifts of baked goods or food instead of pricier, store-bought items.
If and when you get a tax refund this year, vow to put it directly toward bills or your debt with the highest interest. Resist the temptation to splurge! It will only hurt you in the long run.
You can make resolutions any time, but the sooner the better! The key to making and keeping resolutions is not to dwell on the past, but to learn from what DIDN’T work and focus on what DOES work. Even if they seem small now, forming healthy financial habits every day can make a big difference in a year. Give your finances the time, attention, and exercise they need to get back in shape in 2017 and, before you know it, your financial resolutions will turn into regular routines!
At Christian Credit Counselors, we help consumers battling credit card debt and desiring a more positive financial future. For more tips on how to quickly improve your finances with debt counseling, please contact us.