How to Stick to Your Financial Resolutions

According to a study by statista.com, 44% of Americans polled stated that their 2021 New Year resolutions were to save more money. If you are looking to achieve a financial goal this New Year, take a look at this article for some tips on staying on track.

Follow the S.M.A.R.T Goal Framework

S.M.A.R.T stands for specific, measurable, attainable, realistic, and time-oriented. This means your goal should not just be ‘to save money’ or to save an unrealistic amount of money. A good place to start with a financial goal is to say something like “I want to save $300 each month by cutting out restaurants and fast food.” This follows the S.M.A.R.T framework because it is specific about how much you want to save and how you will do it, measurable, attainable and realistic, and it is time oriented because you can check how you are doing at the end of each month.

Check Your Budget

A budget is key to maintaining healthy finances. Check how your resolution fits in with your budget. Will attempting to reach your goal make your budget tight or even not seem doable in the immediate future? It is important to remember a budget is a living plan, and can make adjustments accordingly. It may require you to make some sacrifices to fit a financial plan into your budget, but will be well worth it in the long run.

Prioritize Your Goal

Set reminders, write it down on sticky notes and put it on your computer, check your progress every morning. Keeping your goal at the front of your mind every day will help you to be conscious of what you are doing to get there. It may help to remind you that you don’t need that $9 cup of coffee, or that it may be smarter to pack your lunch for work the next day. It is also recommended to write down what you are saving for and how much you want to save in a place that you see every day. This will help keep you on the right track to achieve your goal.

50/30/20 Rule

One of the simplest budgeting hacks is the 50/30/20 rule. If you don’t want to get caught up in a complicated budget, this is the budget for you.

This rule means that 50% of you monthly income should go to necessities (rent, car payments, utilities etc), 30% of your income should go towards wants (restaurants, movies etc.), and 20% of your monthly income should go into your saving’s account.

Pay Down Debt with the Debt Snowball Method

The debt snowball method is a great way to tackle the debt that has been eating away at your savings. The idea is simple, you simply start paying off your debt in order of smallest to largest. Getting rid of the smaller debts allows you to save more to pay off your larger debts, which may eventually lead you to being debt-free. This system works so well because it rewards you for completing a small task, which makes you more likely to eventually tackle your larger ones.  

Be Flexible

While it will take some self-discipline to achieve your goal, you also need to be aware that unforeseen events may occur. Maybe you or a loved one lost your job and are struggling to make ends meet. You can change or rearrange your plan at any time to fit your lifestyle and needs.