So now that the New Year is in full swing and the month of January is almost coming to a close, this is around the time that many people start to note whether or not they have stuck to the resolutions they have previously made.
Of course, it is not uncommon for many of them to realize that they did, in fact fail to maintain these resolutions. It is also normal for these individuals to feel a certain level of shame that they were not able to follow through. On a more positive note however, there are some that do manage to stick to them and there may just be some specific reasons why they are able to do so.
Focusing on the financial resolutions that many Canadians propose each year, perhaps we can frame this topic by asking how people can sustain their financial new years resolutions?
To help answer this question in more detail, here are 3 tips you can use to make sure your 2017 personal finance New Years resolutions stick.
1) Develop a Budget
First and foremost, if you really want to make your personal finances a priority this new year, you can help set yourself up for more success by creating a new and improved budget. Since budgets are subject to change as your finances change, you really should look to adjust your budget at regular intervals each year – with the start of the year, being an ideal time.
When developing a budget, you need to look at all of your monthly expenses and income, and of course your debts. Looking closely at these figures is key to landing on a budgeting plan that will be a realistic fit for you and your finances.
Now devising this budget is only have the battle, as you also must consider how you will continue to stick it out. While many individuals rely on spreadsheets or other paper copies, budgeting tools such as online platforms and apps are also becoming more popular.
Being able to monitor your spending while on the go has never been easier – and your smartphone or mobile device can be an advantageous resource. Since the temptation to spend while you are out and about can be a real struggle, these budgeting apps can provide you with ongoing notifications and updates that let your keep track of every dollar you are spending.
It really is about finding the budgeting resource that is best for you. Once you do, you are much better equipped to stick to this part of your financial goal.
2) Start Saving More
If another of your financial resolutions is to begin saving more money this year, there are also some methods of aiding you in this endeavour. In order to ensure this resolution will stick, you will want to land on a specific plan for saving. Again, you will want to make sure this is a realistic plan – and not one that will set you up to fail.
While identifying if your plan is a realistic one, some questions you can ask yourself include, how much money do I want to save?, When do I want to have this money saved by?, and of course, what is the purpose for this money?
While all three of these questions may actually overlap, all of them are an important part of this financial goal.
If, for example you want to save $2000 over the next 6 months and you plan to put it towards an emergency fund, you will need to calculate how much you need to save each week/month. By dividing $2000 (your total) by 6 (months), you’ll find out how much money you should be saving each month until then (i.e. approximately $335 per month).
In the end, while your purpose for this money will likely dictate when you need the money, and how much money you need, identifying all of these details are still quite necessary as they can help you stick to your budget and your plan for saving with more overall commitment and effectiveness.
3) Pay off Debt Faster
In addition to the first two resolutions, another financial goal you may have for 2017 is to start paying off your debt a lot faster. Again, here you will want to set certain criteria for paying off this debt.
For example, how much debt do you want to pay off? When do you want to have this amount paid off by? Once you have specified the amount and the timeframe, the next and perhaps most critical step is to decide the HOW.
So, will you plan to reduce your debt by 25%, 50% – or more?? Do you want to have this amount paid off in 6, 9, 12 months? Here, the how can actually be two-fold. At this junction, you may identify which debt you will target, credit card debt, for example, followed by a plan for how you continue to pay it down.
If you want to focus on the credit card debt, because perhaps it has the highest interest – then coming with the strategy you’ll use to reduce this debt more effectively is your next step. You can let your budget help guide your spending – and your saving, ultimately freeing up some additional money each month.
Perhaps, you will also start paying off more than the minimum credit card balance, even doubling your monthly payments. If the debt is extreme and you have been struggling to pay it off at all, perhaps considering other measures such as consolidating your debt can also be a method of speeding up the rate at which you reduce your overall debt load.
All in all, you need to choose an amount, a timeline, and a method that are all realistic options for you. By having a detailed plan put in place for paying off your debt, you will also encourage a more successful outcome as opposed to not being as prepared or committed to this particular financial resolution.
In order to ensure that 2017 is the year you stick to your personal finance resolutions, this will require that some planning and some specific strategies are used to support you through these processes. By doing so, you can actually escape the norm and continue to follow through with your important financial resolutions this year, as well as each New Year after that.