Another thing that usually comes to mind when we think of New Years Day are New Year’s resolutions. Something about the start of a new year that gets us thinking about where we are now and where we’d like to go in the coming year. Maybe we want to eat less or exercise more. Maybe there are relationships that we want to improve in the coming year. Perhaps that relationship is our relationship with God. We resolve to read our Bible every day or be more faithful in going to church.
Not the least among the resolutions that we make are those that revolve around our finances. We want to pay down debt. Save more money. Get a better job. Start investing for retirement or college.
How to make your resolutions stick
The only thing that is about as likely as our plans to make resolutions for the new year is the probability that come February 1st our resolutions will be forgotten. We start with the best of intentions. We really mean to change. But, somewhere along the line we slip back into old habits. How do we make changes that will last?
1. Be specific
I want to “save more money” is a bad goal. I’d like to have $2,400 in savings by the end of the year is a goal that can be tackled.
2. Break it down into manageable pieces
Taking that last example a step further: If I want to save $2,400, then that is $200 a month. If I get paid twice a month then that means I need to set aside $100 out of each pay. Now my goal is more concrete and it will be easier for me to follow through.
3. Be realistic
Make sure you set goals that you can achieve. Saving $2,400 is a specific goal you can achieve. I’m going to save $200,000 to fully fund my kids college is probably not too realistic unless you have a really exceptional income. I’m being a bit extreme with that example but the point is that it is good to set goals that stretch you a little, but don’t set your goals so high that you become discouraged before you even get started.
4. Be accountable
Find a trusted friend that will hold you accountable. This might be a spouse or other family member. Maybe a close friend. Maybe a pastor. Just make sure it is someone who loves you enough to bust you a little if you get off track. Share your goal with them. Set up a regular time when you will get together to discuss your progress. Knowing someone will be holding you accountable will go a long way toward keeping you on track.
5. Reward yourself
Set intermediate goals and reward yourself if you achieve them. If you are trying to get out of debt then perhaps you treat yourself to a nice dinner out as you finish paying off each debt.
Track your progress in a very visual way. Make a chart and put it on the refrigerator. Keep a spreadsheet. Do something that will visually reinforce the progress you are making.
If possible automate your goal. This is one of the great things about workplace retirement programs if you have that opportunity. If you have your savings auto-drafted from your paycheck before it ever hits your bank account then you remove the temptation to spend it. It is a great way to keep yourself on track.
8. Remember the ultimate goal
Focus on where you want to be and use that to motivate you. Need to save to have a real emergency fund? Imagine the peace you would feel if you had a few thousand dollars in the bank. Hoping to pay off some debts? Imagine how good it would feel if you didn’t have to write those checks each month. Imagine how you could give if your money wasn’t already committed. Use those ultimate goals as the motivation to stay on track when you start to waver.
Ask God for help. I believe God will bless His children when He sees us trying to do wise things. If you are trying to handle your finances in a way that follows Biblical principles, ask God to help you honor Him in these areas.
Make 2013 the year you change your life for the better
Taking the time to evaluate our life and try to make changes for the better is one of the best parts of a New Year’s celebration. Spend some time considering where you need to improve. If you are doing a good job financially, consider what changes you could do to make your finances really great.
The key is to allow yourself some grace in the process. If your goal is to save $2,400 and you “fail” and only save $1,500, did you really fail? Of course not. You are $1,500 better off than had you set no goal at all. That’s a victory to celebrate. If you do not set goals though you will find yourself in the same place next year as you are today.
What are your financial resolutions for 2013?
Photo credit: polkabeat (creative commons)