Besides losing weight, getting your finances into shape is probably one of the most popular New Year’s Resolutions every year. But as with other resolutions, it is can be a pretty nebulous goal unless specifically defined.
Saying you want to make a change or do something is not the same as actually doing it. To make a resolution stick, you have to change the habits that got you to where you are. Just as overeating and a lack of exercise can contribute to your being overweight, not practicing good money habits can lead to financial problems or disaster.
Also, like the losing weight example, if you have a defined goal in mind, like lose 20 pounds, you are more likely to try to achieve that goal and stick to it. With your finances, a goal such as “pay off $10,000 credit card debt” is much more specific and actionable than just “reduce my debt”.
Make your resolutions specific goals
Instead of “save more money”, I will save $200 per month for a total of $2400 in 2009.
Instead of “reducing my debt” I will pay off an extra $50 per month above my minimum payments.
Instead of “paying off the car loan”, I will pay an extra $100 per month till the car is paid off.
And so on. Giving yourself specific goals, that you can take action with on a regular basis, can help you turn resolutions into habits.
Making your resolutions habits
Once you have a specific goal in mind, you can make that goal a habit. Where are you going to get that $100 a month to add to your regular car payment? Well, you could trim your expenses, by $100 a month, or earn more income. Breaking it down even further, it would be $25 a week, or $5 per weekday. Could you cut back on eating out at lunch and bring your lunch to work or cook at home more often so you don’t have to eat out? Could you work a few hours of overtime per week, or start a side business? Taking regular action (habits), and making the correct choices on a daily basis can help you reach your goal.
Tips for sticking with your newly developed habits:
Don’t over do it- Keep your goals reasonable. Trying to lose 50 lbs in a month, or pay off $5000 in two weeks might be a little to lofty.
Start small- Even a few minutes a day, or a few dollars a day can help you reach your goals.
Tell others- Let other people know what you are trying to do and why.
Track your progress- Keep track of how you are doing, and make adjustments if necessary.
Acknowledge your success-Reward yourself!- If you meet your monthly goals, reward yourself-just don’t over do it.
Similar Posts:
- Are Your Sticking to Your 2008 Personal Finance Resolutions?-Review Your Progress and Get Back on Track Today!
- Developing A Burning Desire to Improve Your Finances-Part II-Key Traits of Success
- 5 Common Money Related Resolutions that Can Help Your Finances in 2010
- 10 Ways To Develop a Saving Habit
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When you are looking to save some money, I find it most helpful to list your expenses from the largest to the smallest. It really helps focus your energy on where you can make an impact. Too many people spend their time trying to shave a few dollars from the smaller items (which can be easy and worthwhile), but cutting one of your bigger expenses by just 5% could put a lot more savings into your pocket than things like packing your lunch twice per week.
@Financial Planning- That is a good point and definitely true- if you can cut back or eliminate larger expenses, it can make a really big impact quickly.
Fantastic advice. Some goals seem so unattainable until you break them into smaller pieces. Then it is much easier to know the habits you have to change to accomplish the goal.
i look at my finances differntly than other people. I try to never incure recurring monthly expense except for the basics which cannot be avoided. I try to never purchase something until I have made the extra income necessary. So, if i want that new car, then i have to not only make the down payment but also add the monthky cost of the new car to the bottom line. meaning, i have to generate the extra income. if i cannot figure out how to generate the extra income then I just don’t get the new car.
@Surviving-Thanks! That is a good way to look at taking on additional recurring expenses.
Telling others is definitely a great thing to do, because they can help hold you accountable.
I need my friends to kick my butt every once in a while.
@TStrump- That’s a good idea-sometimes your friends can help you stick to your goal, as they can be very powerful influencing us- peer pressure, I guess!