Every January, we lay out our resolutions for the year to help us stay focused. Just putting them out there is a great first step: Research shows that people who openly make goals are 10 times more likely to reach them than those who don’t – and that applies to financial goals, too.
But what’s the next step? How can you make it even more likely that you’ll keep those resolutions? Whether you’ve resolved to save money for a rainy day or your first-born’s college fund, we’ve got money management tips to help you stick to your goals all year.
1. Get real about your goals. When you’re serious about improving your finances, your natural inclination may be to set the bar too high in order to get results. But even well-meaning resolutions can feel like a penalty instead of a goal when taken to extremes. That’s why it’s important to take time to set sensible targets that still allow you to enjoy life while you work toward them.
2. Create a reasonable plan. Now that you’ve set your goals, how do you plan to achieve them? That takes a realistic approach as well. For example, you could give up eating out completely and take no vacations in order to save money. But limiting these types of expenses instead of cutting them out entirely will make your resolution easier to stick with.
3.Automate your payments. Automating everything from your car payments and retirement account contributions to monthly utilities, investments and even your charitable giving can make you stick to your plans. Whether your goal is to improve your credit score by paying bills on time or save more for retirement, use automation to your advantage.
4. Use the buddy system. Just like a workout buddy can help you stay accountable for getting to the gym, a financial accountability partner can help make you a better money manager. Whether it’s your spouse or a best friend who’s trying to stick to his or her own resolutions, find someone who will encourage you and who you can support in return.
5. Keep your goals in sight. You can post them on the fridge, the bathroom mirror or the bulletin board over your desk; just make sure your financial goals stay front and center. Additionally, schedule monthly or weekly “check-ins” to monitor your progress. For instance, setting an alert on your phone to do a budget checkup will help you hold yourself accountable and resist a splurge.
6. Get smart(er) about money. You don’t need a degree in finance to make sound financial decisions, but getting additional info related to your goal doesn’t hurt. Whether it’s subscribing to the SAC FCU blog, taking a class, attending a seminar, finding a financial mentor or checking out books, make an effort to learn more about your money and how to manage it.
7. Build in rewards. You may be a long way from your ultimate goal, but rewarding yourself in some small way when you reach a milestone – say once every quarter during the year – can help you stay motivated. Get creative with your rewards and think outside the “buy” box or keep your spending very low. For instance, you could take the time to explore an out-of-the way park or take in a free lecture with a friend.
Lastly, don’t forget to step back every once in a while and see how far you’ve come. You may be surprised by where your determination and a few sensible money management tips can take you!
What tricks do you use to stick to your resolutions? Share your ideas in the comments below.
Ready to commit your resolution to paper? Download our free Financial Goals worksheet and get started today!