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Do you remember those resolutions you made just a couple of months ago? It’s okay if you answered “no.” An estimated 80% of people fail to keep their New Year’s resolutions by February. If you’re one of the rare few who have been keeping up with yours until now, that’s very impressive. The majority break theirs within just a matter of days.
On the other hand, if you need help keeping the promises you made to yourself at the start of the year, this blog may be of assistance to you – specifically if you want to focus on your finances in 2024. This is a common desire, and struggling to maintain focus on it is also normal, so you don’t have to feel alone! Last year, Fidelity conducted a survey showing that two-thirds of American adults planned on making resolutions to improve their finances when the clock struck midnight on December 31st. Breaking that down further, 38% had the goal of paying down debt, 41% wanted to save more, and 30% were determined to spend less.
It’s no surprise that so many people shared these goals toward the end of last year. Constant negative headlines make our economy seem uncertain at best. Even if you can look past the anxiety-producing articles, it is hard to ignore the rising inflation and interest rates. However, both worrying and setting undefined goals will not help you. If you want to get your financial resolutions back on track, keep reading for helpful strategies and tips.
Create an Action Plan
First, break down your goals into manageable and actionable steps. It can help to identify what achieving your resolution would look like to you, and all the milestones you will have to hit along the way. Once you know more specifics about what you’re working towards, it will be easier to establish a reasonable timeline and realistic to-dos.
For example, say you want to finish paying off your car this year and you still owe $5,000 on it. That means you will have to put $500 towards it every month. Do you have that in your budget? If so, set reminders for yourself to make manual payments, or better yet, automate this task for yourself.
Enrolling in automatic payments can help you achieve many financial goals. Once you’ve taken the initial steps, almost no further effort will be required from you. You’ll be making progress each month without even giving it a conscious thought.
Other tactics that may be worth adding to your action plan are to make it fun and work with others. If putting a gold star sticker on your calendar every time you make a payment will motivate you, do it! For those who need a little more incentive, enlisting an accountability partner might assist you. Schedule recurring “money dates” with your spouse, a friend with similar goals, or even an online accountability group member to discuss your progress.
Build Healthy Financial Habits
One purpose of creating your action plan is to identify strategies that will turn dreaded but necessary financial tasks into repeatable habits that will keep you moving toward your goals with ease. You may know you want to save more, but doing so can be a real struggle if you don’t create a healthy routine. Like paying down debts, it all starts with considering your budget. Ask yourself how much you can comfortably afford to put away each week.
When you have determined that number, consider opening a high-yield savings account if you don’t already have one. By stashing away your smaller sums of money in such an account, you will be actively earning more at the same time. Say you have an account with 5% interest. If you start with a $20 deposit and keep adding that same amount every week (without withdrawing any) you will have more than $1,000 saved at the end of the year. Thanks to compounding interest, getting into the good habit of saving $20 a week can make a bigger impact on your finances in the long run than you might initially assume.
As great as it feels to reach other financial goals, building habits related to saving is crucial for a successful future. You never know when life is going to throw you a curveball like car issues, a trip to urgent care, or unexpected home repairs. Growing an emergency fund to prepare for these types of situations is important, but visualizing what else you might need your savings for in the future can be more inspiring. If there’s a wedding, move, or addition to the family on your horizon in the next few years, keep that in mind if you’re struggling with staying committed to the weekly deposits.
Stay Motivated & Overcome Obstacles
Many challenges arise that tempt people to stray from sticking with their financial resolutions. Achieving the goal of spending less can be a lot harder than it sounds. Some aspects of this may be out of your control, like the emergencies you’re saving for or rising inflation rates. However, other efforts require exercising self-control and discipline.
Many people have gotten comfortable with making impulse purchases. This can easily lead to overspending. Instead, try giving yourself time between seeing something you like and buying it. Then you will be more likely to think critically about whether you need that item right then or if you want it but you can wait until it fits in your budget to get it.
Emotions can complicate the matter even further. After all, the term “retail therapy” is common for a reason. If this resonates with you, work to find different coping skills that can help you combat stress, boredom, or other emotional triggers.
Finally, don’t succumb to peer pressure. “Keeping up with the Joneses” is the relevant idiom in this scenario. Overspending to create or maintain a certain lifestyle, especially when you are doing so just to impress others, is unnecessary and can lead to financial strain and undermine your efforts to prioritize long-term financial goals.
So, if you set resolutions to pay off debts, save more, or spend less, keep your eyes on the prize! These are worthwhile goals no matter the time of year. Planning, incorporating new habits into your life, and remaining disciplined will almost always pay off in the long run. By following these techniques, you will improve your overall financial well-being throughout the rest of 2024, and beyond.
There are real benefits to prioritizing your finances, such as increased stability and reduced stress. When you lay a strong foundation for your future, you can go with the ebb and flow of life knowing that you are prepared for whatever may come next. If you need assistance taking proactive steps toward achieving your financial resolutions, you can always talk to a professional. Support and knowledgeable advisors can make a world of difference.
