A Proven Solution for Keeping Financial Resolutions
Hopefully everyone takes a good look at their finances each new year and tries to make some improvements to their bottom line. But no matter what resolutions you choose to make this year, this solution can help you be successful.
Here is an easy guide to avoid getting stuck in the new year.
Pick just one major goal.
Trying to fix too many things at once splits your focus and weakens your resolve. What is most important to you? For example: Get out of debt.
Identify and quantify your resolution.
Set a concrete goal, not just a vague desire. “I want to pay off all of my credit card debt.” Establish exactly where you stand financially. You can’t fix something unless you know how bad it is.
Stop the madness!
Credit cards can become a trap because they allow you to spend more money than you make. End the cycle by avoiding new charges on your cards. It boils down to this: Make more money than you spend.
Tackle your outstanding credit card debt by paying more than the minimum each month.
There are several proven methods to do this like the “snowball method” where you pay the highest interest amount first, then the next highest, and so on until the debt is gone. An excellent resource for putting together a debt payoff plan is How to Conquer Debt No Matter How Much You Have by The Dollar Stretcher.
Stick to it!
The hardest part of most resolutions is sticking to it long enough to see results. Most goals fail because of a too-strict plan. Set realistic goals that are reachable. If your family is used to eating out four times a week, cutting it out entirely will only lead to resentment and ultimately failure. Start by eating more meals at home and choosing less expensive restaurants. Gradually reduce your spending in this area. Bonus: Eating more at home can bring families closer together.
What makes you overspend and reach for the credit cards? Is it those late-night commercials that entice you with miraculous products or a lazy afternoon shopping on your favorite website? Do the words “clearance,” “bargain” or “only one left” trigger a must-buy response? Avoid temptation whenever possible. Keep your resolution firmly in mind and just say no to overspending on unnecessary items.
Replace your spending habits with better ones.
If you take something away, it is much easier to deal with if you replace it with something else. For example, if you limit your extra spending, find something free to do with your family. Go to the library! This used to be a staple of family entertainment, but with all of our technology at home, it is often forgotten. You can spend an afternoon browsing for books, go online, play or rent video games, watch movies, and even attend special events like buying discarded books by the bagful or joining reading groups for all ages.
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Oh no! You messed up and bought a gorgeous dress that was marked down 80% but you have no idea when or where you will ever wear it and it is non-returnable! Instead of beating yourself up, reassess your resolution. Maybe a small allowance for “extras” could be worked into the budget. Don’t give up just because of one slip-up.
Resolutions are easier when they are shared, especially if they are for the good of the family’s financial future. Get your spouse and family on board by telling them why you are spending less and cutting out a few luxuries.
When you reach a goal, celebrate!
Give your motivation a boost when you pay off that first credit card or avoid a major purchase that you really didn’t need. By acknowledging your accomplishment, it makes you more ready to forge ahead.
Whether you call it a goal, a plan or a resolution, you can accomplish it. Let this be the year you triumph by using this proven solution for your financial resolution.
Reviewed November 2021
About the Author
Shaunna Privratsky became an expert in personal finance out of necessity. Between writing, reading and gardening, she is always on the lookout for bargains. Visit her at The Discount Diva.