It’s a new year and with it comes a clean slate to set new goals for your money.
Saving money and paying off debt are popular financial goals to set as New Year’s Resolutions. Unfortunately, most people actually give up on their goals by mid-February.
So here are some tips to help you stay on track and reach your financial goals this year.
Tip 1 – Be Reasonable
It’s ok to make your goals a little risky, but don’t push yourself into the delusional zone.
You may hear stories about people who have paid off an enormous amount of debt in a short time, but that’s not the norm.
You risk fizzling out from frustration if you try to compare yourself to others.
Make sure you’re setting a reasonable goal. Make it challenging, but not impossible.
Tip 2 – Start Small
Excitement and energy toward your goals are high at the start, but the newness wears off.
Break your goal down into smaller steps to help you maintain momentum.
For example, if you’re facing a mountain of debt, start by determining your income vs. expenses. Next, look for some expenses to cut. Then, start brainstorming some new income ideas.
Taking smaller action steps and getting tiny wins along the way will help you stay motivated.
Tip 3 – Stay Focused
It’s easy to make goals. It’s hard to stay focused on them.
Within goal setting circles they say the key to maintaining your focus is to “know your why.”
Ask yourself why you’re setting that particular goal. Also, realize that internal motivations make achieving your goals more likely.
A good example of this is with weight loss goals. An internal motivation for losing weight might be to get healthy so you have the energy to play with your kids. An external motivation could be that the doctor told you to lose weight.
External motivators produce goals you view as things you should do. Internal motivators lead you to goals you want to do.
If you hit a roadblock along your way, having a strong “why” will help you break through it.
Tip 4 – Be Patient
Most financial goals are more achievement-oriented – like paying off debt or saving money. But to reach either of those, you’re going to need to adjust your spending habits.
The most recent research shows that it takes an average of 66 days to change our behavior. So if you’re not used to tracking your spending or making a budget, it will take some time to get into the habit.
Be patient with yourself and give yourself time to adjust.
Tip 5 – Automate Things
Setting up automatic payments and/or deposits is a great way to hit your financial goals.
It can be tricky to know how much to automate in the beginning, so start small.
For debt management, set your credit cards to autopay at least the minimum amount due.
Eventually, you’ll want to increase this to the statement balance or even paid in full. But if you’re struggling to pay off debt, start with the minimum to avoid late fees.
For savings goals, transfer a small amount into your savings each paycheck. It may seem silly to set aside a tiny amount, but starting small will help ease you into the habit.
Transferring large amounts can lead to a feeling of deprivation. Once your spending habits adjust to meet your savings goals, you can up your deposits.
Let’s Do This Together
I love the excitement of setting new goals! But I’ve also experienced the regret of leaving them behind when the enthusiasm fizzles out.
I hope the tips above will help you tackle your goals this year, but it’s also helpful to have a support network and the right tools. (I’m a big fan of the SELF Journal from BestSelf.)
If you’ve got a financial goal, leave a comment below and let’s keep each other accountable!