5 tips to keep up with your financial resolutions
Financial resolutions, both big and small, can be tough to keep. But they’re well worth it. Here are a few tips to ensure you’re tracking towards financial success this year and beyond.
With January in the rearview, you might be tempted to leave those New Year’s resolutions behind, too. When really, now’s the time to be super honest with yourself and determine whether or not you’re still on track.
If you’re struggling, it might be time to re-evaluate those resolutions, especially your new financial goals, ensuring they’re realistic and setting you up for success.
Financial goals can be big (get out of debt) or small (put $10 into savings every month). But regardless of their size, your goals should all have one thing in common: to serve as a stepping stone on a path that gets you where you want to go.
So, if like so many of us you need a little reminder about why you set those resolutions in the first place, read on.
1. Determine your “why”
What’s one big thing you want to do in your life, where a lack of money might be holding you back? Think saving up for a home or buying a car. Or maybe traveling around the world, or retiring early. Maybe you have longer-term goals like putting your future children through college debt-free.
Whatever your “why,” make it yours, and think of it often. Get creative here and let that big picture “why” be the driving force towards getting your money right.
2. Create a path towards that big goal
If your “why” feels overwhelming and seems like it can’t be done, there’s a chance you might have to set your sights a bit further into the future. But hey, that’s totally fine. Instead of fretting about the timeline, start small and work backward. Determine the steps you need to take to achieve your big goal.
If you want to save for a down payment on a home, you’ll need to start saving for it. Start with how much you need and when you want to buy your home. Then calculate how much you can realistically save every single week or month without causing financial distress. Ask yourself questions like:
- How much can I afford?
- When do I want to buy a home?
- What type of account will give me the highest returns with minimal risk?
Move your numbers around accordingly, based on your income and expenses. If your figures are too far away (maybe you want to buy a home in two years but your calculations are showing expectations for five years out), you might need to make some adjustments.
3. Adjust your budget
Your budget is a living, breathing document and should be treated as such. Update it whenever necessary. If a new expense comes into your life or goes out of it, your budget should reflect that change.
Go over your budget to make the appropriate changes for your new goal. If you’re building up your emergency fund, add the line-item to your budget so that money is accounted for, just like every other bill you have.
4. Set up autopay
Autopay lets you set-it-and-forget-it without the daunting task of manually making payments. Many times, our minds tell us that we put our long-term goals last, which might mean not making payments towards the things that will one day bring us joy. To avoid this personal back-and-forth shame fest, set up autopay.
Whatever your goal, autopay is a step in the right direction. If you want to retire early, setting up auto contributions means you can max out your retirement plan rather than adding contributions whenever you feel like it. If you’re paying off credit card debt, autopay lets you set up how much you can afford to pay every month.
5. Check up on your progress
Long-term goals have one major downside: they don’t always give us immediate gratification. Rather than get discouraged that you aren’t seeing results, you can always check back to see how far you’ve come.
You can also adjust whenever you want and allow yourself to make changes based on new occurrences. If you got a bonus at work, for instance, add that to your savings goal. If you paid off your car and have a chunk of extra cash every month, you’ll now have somewhere to put it.
Your goals can and should change along with you. It’s important to stay on track, but give your goals a bit of breathing room to grow and shift as you do.