More than one-third of the New Year’s resolutions Americans make are financial in nature. But many of these promises are long forgotten by the time Valentine’s Day rolls around. Stick to your goals by making good financial habits a top priority in the new year.
1. Be specific
Research shows that quantifying New Year’s resolutions leads to greater success. Instead of vowing to “pay off debt,” plan to commit an extra $100 per month toward your credit card balance.
2. Take a long-term view
Start with a big-picture goal. Do you want to buy a house in the next three years? Start a family in the next five? Retire by age 60? Work backwards to see how small savings goals can put you on the right path.
3. Check yourself first
Take advantage of a free credit report (you are entitled to three per year) and make sure there aren’t any red flags. If there are negative or inaccurate items, work toward getting things in the clear.
4. Determine your net worth
Review your financial assets and obligations to calculate your net worth. Once you have a firm grasp on where you stand financially, it’s easier to pinpoint areas for improvement.
5. See the forest, not the trees
If you’re a long-term investor, look sparingly at your investment accounts. Keeping too close an eye could actually lead to irrational decisions.
6. Keep it real
You’ll be far more likely to make your resolutions habitual if the goals are attainable. If you’re looking to save money or pay off debt, budget a reasonable dollar amount. If you want to tighten your spending, make sure you still allow for some discretionary purchases.