A lot of people will want to get into financial shape to start the year right. That is a great intention and a lot of people actually have great plans. They want to start saving more money or even putting more into their retirement. Others try to pay down their debt much faster by aggressively making extra payments to their lenders.
A lot of people even try to make some drastic physical changes and commit to some form of exercise at the top of the year. They plan to join their local gym, invite friends to go on a regular run, or even take up a new sport. These are all done with good intentions but the problem is that not a lot of people are able to sustain it. This is much like your finances.
You want to be in financial shape but one of your main goals is to sustain that all throughout the year. A lot of people simply burn out a few months into it. They start out very eager but fail to finish what they started. The same opportunity to start at the top of the year can also be a challenge because of the journey ahead.
There are a few ways to help you reach your money goals for the year in a way where you do not burn out easily. You need to have a process so you do not lose your way. Here are a few of the things worth looking into which can help you put some order in your new year finances.
Do not be afraid to make changes
If you want to be in financial shape, you need to be bold enough to accept change. You need to start doing things differently. You might be set in your ways and it would be a challenge to do new things. If you have been used to going out on fancy dinner dates every month, you might need to dial it down a little.
If you are used to going out with your friends every single weekend, that might have to change if you want to be in better shape in terms of your finances. Rather than fear these changes, you need to embrace them. Rather than eating out every week, why not learn how to cook. You can even grow some of your ingredients.
That way, you can have your friends over at your house rather than a fancy and expensive restaurant. You can still enjoy your time with your friends but not spend as much as before in food. You can even learn a new skill which your family can appreciate every single day. Rather than fear change, you need to be excited about it to get into better financial shape.
Set your targets
When you are trying to get your finances in order, one of the things you need to focus on is a target. This is important because NYPost shares that only 13% of people they surveyed had a 5-year plan for their finances. Otherwise, you will be a floating aimlessly in life with no specific heading. That will start to be a problem because your current actions have no basis. It is a lot like losing weight where you do not set a target weight. You can still end up overweight or severely underweight if you do not set up a goal.
If you want to be in great financial shape, you need to set targets you want to achieve. If you want to strengthen your emergency fund, you need to define the amount you want to have at the end of the year. It cannot simply be a desire to have a stronger fund. You need to define the exact amount you will aim for.
Once you have a definite target amount, you can plan your approach. If you want to strengthen your fund by $1200, you can split that into 12 $100 goals. You can do that every month from January to December. Once you get to the end, you would have that amount in your emergency fund ready to help you when needed.
Roll up your sleeves
All that planning and committing to change your ways will all be for nothing if you do not work on your goals. You can be in better financial shape compared from before if you put in the work. You can plan to save that extra money you have and use it to strengthen your emergency fund. However, if you do not work to make it happen, your plans will go down the drain.
If you are using the envelope system in budgeting your finances, you can include savings in one of the envelopes. Make sure that you physically put the money there every month and put it in a dedicated account if you have one. You can also use technology to your advantage when trying to save money for future use.
For starters, most banking institutions offer online banking technology. You not only get to monitor your accounts online, but you can also make online payments and even move your funds from one account to another. There are also mobile apps that help you save money even loose change. You just have to find the best one that works with your lifestyle.
Commit to your goals
When trying to improve your finances for the year, this is one of the factors which will keep you going until the end. You need to commit to your goals until you see them through. Just like when you are trying to lose weight, you do not give up the first few weeks of the year when you do not see results. It takes time for your progress to show so you need to stick to it.
The same thing applies when you are trying to get into better financial shape for the year. You need to stick to your goals until you see the result. You will see small improvements and that could be enough to get you going. These small wins add up to your overall objective in the end. You just need to keep on going and see the whole thing through.
Expect challenges along the way
You need to mentally prepare yourself as well when taking on any type of financial goals in life. There will always be challenges along the way. Some will be small and probably insignificant but there will be times when you will be tested. You might even toy with the idea of simply giving up but you have to be strong and carry on. You need to be tougher than the challenges ahead but do not forget to learn from these situations.
It is an exciting time for you if you are trying to get into better financial shape but there will be challenges ahead. You need to be mentally strong and have a process on how you will reach your goals. This way, you get to see small wins which all add up to your financial targets in the end.