By Jillian Taylor-Mancusi
If your budget could talk, it might suggest that you make some New Year’s resolutions that will help you set your financial house in order. The way you handle your money has a huge impact on many aspects of your life. By setting financial goals at the beginning of the year, you have the chance to make changes that will have a positive influence on your life as a whole.
Like other types of New Year’s resolutions, financial resolutions often fail because they are not realistic. By trying to do too much, too fast, you can sabotage your plans and become discouraged. Before you set your goals down on paper, try a brainstorming session. Write down all of the things you would like to accomplish this year–financially, professionally, and personally.
Next, prioritize your ideas, assigning a financial and time cost to each goal. Many of your ideas may seem to have little to do with your budget, but actually do cost money. A goal like de-cluttering the garage may seem like a freebie, but may end up costing you a few hundred dollars for trash hauling services or refuse fees.
Finding Money for Your Resolutions
Once you have a good idea about which goals are the most important to you, it’s time to find the money to finance your goals. Whether you are saving for a new couch or planning to pay off a credit card, you will need to set aside money to pay for your resolutions.
Finding cash to finance your new goals may seem daunting, but with a positive attitude and a touch of creativity, chances are good that you can afford to make significant progress toward your goal. There are lots of places to look for the money you need, such as
- heating and cooling expenses,
- meal planning and grocery shopping,
- gift giving,
- vacation costs
Remember that you don’t have to eliminate items from your budget, you just need to adjust your spending. For example, instead of spending a thousand dollars on a family vacation, consider taking a few long-weekend trips close to home. You can save a lot of money and still enjoy visiting a new place with those you care about.
Track Your Progress
Making the sacrifices needed to reach your goals can be frustrating if you lose sight of where you are going. Keep track of your progress and reward yourself for a job well done. For example, if you are saving for new furniture, you might print off a line drawing of a couch and color it in as you add money to your furniture fund. If you aren’t the visual type, visit the furniture store instead of going out to dinner and reward yourself with a tasty meal at home.
While you work on New Year’s resolutions, consider adding some financial resolutions to your list of goals this year. Using your money wisely provides you with the resources you need to keep debt under control and to reach important personal goals.