When it comes to New Year’s resolutions, many people make financial ones. You know how it is: you want to save more money, you want to make more money, or you want to start investing. These are all great goals, but sometimes they end up being more of a fantasy than a reality.
It’s tough, I get it. We all go into the new year with the best intentions, but without a plan in place, sticking to your resolutions may seem impossible. To keep you on track, here are 5 ways to make sure you stick to your New Year’s money resolutions.
Set realistic goals
One problem with financial resolutions is that some people set goals that aren’t realistic. For example, your goal might be to save an additional $10,000 this year, but how are you going to do that? That works out to $833.33 per month, so unless you’re expecting a massive raise or you’re going to slash your budget hard, you could be setting yourself up to fail. Having a goal of saving an extra $100 a month is a better start since it’s much more achievable. If you find that goal to be too easy, then slowly raise the amount throughout the year. The point is, you want to have goals that you can reach so you build on them.
Hold yourself accountable
No one is expecting your resolutions to happen right away, but you do need to hold yourself accountable. Let’s say you want to get a new job – well, employers aren’t just going to call you and make you an offer. You need to take steps to get there. Perhaps you should set a goal of updating your resume and online profile by the end of January. You could then apply for at least ten jobs every month. Another goal could be to attend networking sessions. Having these steps in place makes you accountable and forces you to keep working towards your goal.
Automate your finances
Going back to the example of wanting to save more money, you could easily automate this process. Every bank allows you to set up automatic withdrawals/transfers, so there’s no reason why saving money needs to be difficult. The key is to time your transfer right when you get paid. By doing this, you’re paying yourself first, and you won’t even miss the money since it’s already gone. Ideally, you should use a digital bank to hold your savings since they pay a better interest rate compared to traditional banks.
Prioritize your goals
Having more than one resolution is normal, but you’ll likely want to prioritize your goals. For example, it doesn’t make much sense to try and save money if you’re currently in debt. Focusing on your consumer debt is more important since you’ll pay less interest in the long run. Once your debt is clear, you can take that money you were using for repayments and apply it towards your savings instead. Always look at your goals and figure out which ones need your attention first.
Do the little things
Regardless of what your financial resolutions are, there will usually be little things that you can do to help you reach your goal. Considering packing your lunch more or dropping that daily coffee. You could cancel one of your streaming subscriptions or renegotiate your cell phone plan. Every decision you make can have a lasting impact on your goals.
Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. As a completely self-taught, do-it-yourself investor with no formal training, he makes money easy to understand for all Canadians. His specialties include personal finance, budget travel, millennial money, credit cards, and trending destinations.
Barry Choi is a paid spokesperson of Sonnet Insurance.