Are You on Track with your Financial New Year’s Resolutions

So, let’s look at some tactics to help you get back on track.

Set specific, measurable goals:

Many of us start the year with well-intentioned but vague financial goals. These could be things like “save more”, “spend less”, or “pay down debt”. These goals are more likely to fail because they don’t make clear the specific actions you need to take in order to achieve them. So, if you have given yourself vague goals for 2021, change them to something more specific like “save $50 a week” or “only spend $150 a week”.

Make them achievable:

Many of us start the year full of enthusiasm and make our financial resolutions too ambitious.

Perhaps you intended to save $200 a week but haven't managed to do so. At this point, many people get discouraged and give up entirely. If you are in this situation, figure out what you can afford. Even if this is just $25 a week, it’s a start. And more importantly, it’ll get you into the habit of saving and put yourself in a great position to increase that amount when you can afford to.

The same can be said if you have a lot of debts to pay off. To someone with multiple credit cards and loans, getting out of debt can seem unachievable. So, rather than looking at your debt as a whole,  focus on paying off the highest rate loan first. The sense of achievement gained from having one less debt will give you the boost needed to start tackling the next one. These little achievements along the way will keep you motivated to carry on.

Automate as much as possible:

It’s harder for temptation to disrupt your  financial goals when those goals are taken out of your hands.

So, if you aim to save or invest a certain amount each month, set up a direct debit into your investment or savings account at the beginning of each month. This way you are less likely to accidently spend it or forget to invest.

On the other hand, if your problem is overspending,  open a separate spending account and set up a direct debit with a set allowance for the week. Since the rest of their money will be out of sight (and hopefully out of mind!), you will be less likely to slip up and overspend.

Don’t let a slip up become a failure:

Many of us slip up on the road to achieving our goals – perhaps you overspent one week, forgets to put money into savings, or buys something new on your credit card. The issue isn’t the slip-up itself; it’s letting this become the new habit. Remind yourself not to miss a beat, dust yourself off, and start again.

Look at new strategies:

If in spite of efforts to save more and spend less, even people 55+  are facing monthly shortfalls, it may be the right time to refinance or even look at alternatives like reverse mortgages.

This can form a sensible part of a structured financial plan and can help you stick to their 2021 financial resolutions.

Oftentimes, a lot of emphasis is placed on making big changes at the beginning of the year. However, meaningful and lasting financial change is much less glamorous. Start by implementing small, achievable habits, and you are much more likely to see that big change by the end of the year.