A financial resolution always comes up at the start of the year because there is a feeling of starting on a clean slate when the new year comes. It is the equivalent of a freed up credit card after you have paid off the balance or a facing the buffet table after almost the whole day in the gym. You get to start fresh and plot out your moves.
Apart from putting a resolution together, it is also challenging to remain committed to the resolution because as time goes by, there are other things that can get in the way. It is also possible that as you go along, you slowly give in to small expenses that gradually grows and eats up on your income. You end up unable to meet the goals you set out to do.
The start of the year finds a lot of people trying their best to put together a new year’s resolution and hearing about how they plan to start the next day only to move it the next day again. Later on after a few months, they are convinced that they will finally get to start with their plans only to see most of the year pass without ever doing anything.
Huffingtonpost.com shares that one of top resolutions people commit to at the start of the year are weight loss goals. Partially because they have eating a lot for the past few months leading up to the holidays that they packed in more pounds than they would have wanted. This is the reason why gym memberships tend to pick up at the start of the year.
New Year’s resolution for your finances
In the midst of all of these, there are a lot of people who are also trying to gain some headway with their finances to a point that they put them in on their new year’s resolution. Here are a few things you need to look into to help you achieve them this year.
- Have a goal to aspire for. As the new year begins and you start off with a clean slate, it is best to lay out some goals you want to achieve for the year. It is not enough to put in some general plans to be more independent, lower down expenses or increase some funds you might need in the future. These are great starting points but your plans for the year should never end with general goals. You need to sit down and get into details on how you plan to accomplish these things. If you plan to manage your debt a little better, check what you owe and see if debt consolidation will work or any other plan. If you need to increase your income, see what you can do with what you have to make it happen.
- Work as a team. When you already have your financial resolution for the year, it is then time to start working on it. But as you might know already by now, any job at hand becomes simpler and easier to accomplish when you get help or work as a team and this includes financial goals. When you set out a budget for the house say the grocery budget or even for utilities, it is important and a lot of help to talk to your husband or wife about it and kids if you already have any. Letting them know the plan and where you need to plug up expenses and getting them on board makes the job a lot easier.
- Keep your reserve funds at a comfortable level. There is no way to predict the future. Even those that calls themselves professionals get them wrong most of the time. The best way to prepare for unexpected expenses is to beef up your reserve funds. Consisting of your emergency and rainy day fund, these accounts will help you face financial challenges head on.
- Never miss a payment. One of the financial resolutions you need to put in your list is committing to meet all your financial obligations specifically debt payments. This can help you increase your credit score and open up a lot more financial opportunities in the future. One thing you can stay away from is high interest rates from lenders. Just like how creditcards.com shared that the interest rate for subprime credit cards can readh 79.9% in interest. This is avoidable if your see to it that you make your payments on items that you purchase.
- Pay your cards in full. One great addition to your financial resolution for the year is to make sure that you pay in full your credit card statement every time you get the bill. It might be challenging for most when you look at it this way so a workaround is to be sure to charge only what you can pay at the end of the month. This guideline can be a welcome addition to what you already have when it comes to credit card use.
- Check your credit score. Creditworthiness is oftentimes measured by your lenders using a three digit number that makes up your credit score. Your score lets lenders know if they can trust you with a loan or credit application and how much interest rate they need to put in to cover their risks. You need to constantly monitor your score to make sure that is reflects your financial character correctly. FTC.gov shares that consumers can get free reports once a year from some of the most popular credit reporting bureaus. Spreading this free report over the course of the year can help consumers track their report and score all year round.
- Exercise and eat right. This might come as a surprise and not have anything to do with money management but your financial resolution’s list could use this one as an entry. One reason is that the healthier you are, the more productive you become. You also get to avoid missing work and not getting paid. There are also scientific proof that being able to exercise releases specific types of endorphins that makes you happier and could lessen stress. This allows you to focus on your finances a little better.
Tips to remember your financial resolution for the new year
If you are all set for your financial resolution for this year, here are a few tips you can check out to give you an edge in getting them done.
- Write it down. You might have a great memory but it is challenging to remember all the things you set out to do by trying to remember all of them. It is also not worth it to try and remember them rather than just writing them down because there might be other things worth memorizing like important financial numbers or even accounts. Write them down so you can have a list you can come back to from time to time to check you status and progress.
- Have checkpoints along the way. Be sure that you are able to have markers along the way to help you keep track of your progress and give you subtle reminders that you need to be at a certain point with your resolutions at a given time.
- Tell someone about it. This is one of the best ways to help you stay true to your money resolutions. This is because you know that someone else knows your plans and can do a spot check at any time asking how you are holding up. This also adds a little more motivation and determination on your end to see your resolutions through until the end.
Financial resolutions are a great way to get you motivated to reach your goals and objectives this year. Getting a list down and sticking to it will help you persevere and accomplish your target financials goals.