Resolutions work only when they're realistic. The year I resolved to "eat more risotto," I totally succeeded (and I didn't literally mean eat more of the delicious rice, but rather to venture to try new things). The year I resolved to become writer-level fluent in Spanish, I failed miserably.
The same logic applies to financial resolutions: Keep them realistic. Work on being marginally better, not being perfect. Set goals that are plausible and track your progress. Celebrate success, and recalibrate when you go off track. If you focus on these four money items, you may not become a millionaire overnight, but you'll be on a better path to financial security.
1. Do a financial audit.
You can only improve from where you are, so you need to understand where you stand financially. Examine how much money you have coming in, how much is going out, and how much you have in debt, emergency funds, and retirement. Complete a financial self-audit so you develop the broad picture of how you're doing.
2. Make a budget.
Once you take a look at the big picture you can set a broad budget. Mark down the dates in the month that you'll spend the money you have no choice about -- rent/mortgage, utilities, car loans, student debt, and whatever other regular bills you have to pay. Compare that to your income and see what's left (hopefully there's a significant surplus).
Assuming there is money left, allocate for savings, retirement, entertainment, and vacations. If you're falling short, then, well, you have to make some changes that probably go beyond the advice on this list (you'll need to cut expenses significantly, or make more money). There are plenty of budgeting apps you can download to guide your spending and saving plan.
3. Make painless cuts.
I'm a seven-day-a-week Starbucks person -- currently, a grande salted cream cold foam cold brew that costs $4.39. I'm not going to give that up, but I am resolving to get my coffee at the Peet's inside the Capital One at least a couple of times a week. That's a big savings, because the Capital One Cafe offers half price to cardholders at all times and free coffee on Monday, Wednesday, and Friday from 9 a.m. to 10 a.m.
I like Starbucks better, but Peet's is fine and it's a very minor sacrifice. These are the types of changes anyone can make that squirrels away a little money with minimal pain. Finding a cheaper grocery store or eating out less can help. Cancel subscriptions that don't give you your money's worth. Say no more often on outings with friends or find cheaper alternatives to pricey dinner and drinks.
4. Look before you leap.
Last year I purchased at least four kitchen appliances that now sit unused, taking up space. Most were impulse buys where I really did not consider how I would use them. Had I stepped back and really considered my actions, I might have saved myself some money.
Try to make larger purchases more methodically in 2019. Move past "I want it" and consider if you actually need it. If you have actual plans to use whatever it is and a purpose for it, then consider if you can afford it, and only then should you make the purchase.
Impulse and lack of knowledge are the enemies of fiscal responsibility. If you understand your finances, you're likely to behave more responsibly. In addition, knowledge makes it easier to enjoy indulgences you can actually afford.
Resolve to take control of your finances and be a little better in 2019. I'm hoping, for example, to cut the number of appliances I buy and don't use in half. That's not shooting for perfection, it's trying to be a better version of me in the new year.
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