Saving money and getting your finances in order is a popular resolution to make at the start of the year.
However, you may have discovered that it can be easier to make a New Year's resolution than it is to keep it. If you committed to financial resolutions at the beginning of the year but feel like you've been slow to make progress with your personal finance goals, that's OK. It happens to everyone. Still, there are several ways to check in and help yourself get back on track.
1. Revisit Your Personal Finance Goals
Sticking to a budget, increasing your savings, managing student loan debt or accomplishing any other financial goal may only be achievable if you track your progress. If you look at what you've saved and realize you're short of your goal, you may want to ask yourself why. For example, if you wanted to save $200 a month for a down payment, but you're still eating out, then you might want to start with small changes to reduce the amount you spend in this category.
If eating out is an indulgence you just can't give up, consider looking at other places where you can cut back or earn more — whether it's getting a less expensive gym membership, making extra money with a side job, or choosing a local vacation destination rather than one that comes with pricey airfare.
Also, you might want to evaluate whether your goal is actually achievable in the time frame you've established. Maybe you set a big, hairy, audacious goal to challenge yourself. That's commendable, but the beauty of financial resolutions is that you can always change them. If saving $100 a month isn't feasible, you might reset your goal to save $75, $50 or even $25. The point is to start establishing good financial habits you can build on. If you haven't already used the SMART goal setting framework, which calls for setting specific, measurable, achievable, results-focused and time-sensitive goals, now may be a good time to try it out.
2. Leverage Technology to Help You
If your financial goals require a lot of manual work — such as transferring money at the end of each month to a dedicated savings account — it might help to automate your habits. Many financial institutions offer online banking solutions that let you set up recurring payments or transfers, so whether your goal was to pay down debt or increase your retirement savings, you can likely remove a step by making this process less manual.
Technology can also help with paying down debt. Let's say you planned to pay off your debt with the highest interest rate first but are struggling to make a dent in what you owe. You could use an app or calculator to see how retooling your strategy could help you make more progress. For example, you might find that paying off the smallest sum of debt first is easier and will make you feel like you've earned a small win. This may boost your motivation to keep going.
3. Create a Reasonable Reward System
Achieving a goal is that much sweeter when you can reward yourself for it. If you've been working overtime to pay off your debt or to save for a house next year, consider rewarding yourself with a small treat. This could be going out to the brunch place you've avoided while you tried to save or having a guilt-free weekend of binge-watching every show on your DVR.
If you'd like to reward yourself with a purchase, consider making it small but meaningful. For example, if you maxed out your 401(k) for the first time this year, you may want to treat yourself to a new pair of running shoes for the 5K you signed up for. Rewarding yourself along the way to accomplishing your larger goal may help increase the chances you actually achieve it.
4. Hold Yourself Accountable
Research indicates that sharing your goals with others actually deepens your commitment to the goal. To make yourself more accountable, consider posting your financial resolution or financial goal on social media, or tell your friends and family. This could be a good way to make progress and find yourself at the December 31 finish line having accomplished what you promised to do on January 1.
If you set financial resolutions at the beginning of the year, consider checking in on your progress and potentially refining your approach. While these ideas can help you get started, you may also want to speak with a financial representative.
Individual Retirement Account