Money Hack: How to set New Year’s resolutions for your money (that you’ll actually stick to)
Screw the gym – make 2018 the year to get financially fit.
New Year's resolutions are a blessing and a curse. The beginning of the year is somehow accepted as the time where everyone gets a fresh start and sets specific goals for the next 12 months – it’s something about those fireworks that makes people all purposeful.
But, alas, not everyone sticks to what they resolve to do. Reports from Commonwealth Bank (as reported by news.com.au) show that gym memberships surge in January while alcohol and cigarette sales plummet. However, we’re back to our old ways come March, with sales for cigarettes and alcohol surging by 12.6%, while gym memberships drop by 17.6%.
Set achievable and realistic New Year’s resolutions. If you want to improve your finances in 2018, here are a few ideas to get you going:
- Make one goal your priority
“Getting your finances in order” is a ridiculously huge task. That involves everything from your credit to your savings. So, instead of having this broad-reaching goal, identify one area of your finances that warrants the most attention and set a goal in that area.
For example, if you have a car loan you might make it your goal to pay it off this year. That could involve making additional repayments or refinancing your loan with a new lender in order to save.
If you have credit card debt, your goal could be to repay this or to get it under control.
Your goal doesn’t have to be debt-oriented, either. If you have minimal savings you could aim to deposit regular savings into a high interest savings account. If you have savings that you want to work harder, you could consider some of your investment options.
As long as you have one goal as a priority, the rest should fall into line.
- Have a list of smaller money goals
Once you have your main goal, you can work out any smaller goals that you want to achieve as well. These should complement your main objective.
For example, if you have set the goal of paying off your credit card, draw up a budget to see how long it will take you to clear the debt and how much you have to repay each week. Then you can see if you can afford to increase your savings by making regular deposits. You can also aim to increase this regular savings deposit once your card debt is repaid.
Other goals could be more specific, such as to start using a budgeting app, switch credit cards for a lower fee or rate, or save up for a holiday.
- Work out all of your numbers
This is extremely important but something that we tend to forget to do. When working out your New Year’s resolutions, attach specific figures to them. If you have a savings goal, either have a number in mind for how much you want to save or decide how much you want to deposit regularly. If your plan is to repay debt, you should sit down and work out how long it will take you to repay and how much you will need to put towards your debt each month to do it.
So, if you are setting financial goals for the future, make sure you keep the above in mind and you’ll be in a better position to achieve what you want by the end of 2018.
finder money hacks is a bi-weekly roundup of the latest tips and tricks to improve your finances. Check back every Wednesday and Saturday for new hacks.