Published in: Credit Cards | Dec. 12, 2019
How to Set Financial Resolutions You'll Actually Stick to in 2020
By: Christy Bieber
Setting financial goals is easy, but sticking to them can be hard. These tips will help.
New Year's resolutions are a tradition and most people have goals they set at the start of the year. Unfortunately, many of these resolutions don't come to fruition and end up forgotten within just a few weeks.
If you don't want that to happen in 2020, it's important to be smart about the resolutions you set -- and to adopt habits you can stick to that will help you achieve your financial goals.
How can you do that? Just follow these simple tips.
1. Don't resolve to do too many things at once
If you set too many goals at once, you'll do nothing more than set yourself up for failure. Keeping track of everything you're trying to do will be too hard, accomplishing all your goals will feel overwhelming, and your money may not stretch far enough.
Instead of trying to do too much at once, make your resolutions from your most important financial goals. These could be the goals that will do the most to improve your financial situation -- such as paying off high interest credit card debt or saving up an emergency fund. Or the things you are most passionate about, such as saving up money for a vacation so you don't have to go into debt to pay for it.
2. Be specific about your resolutions and set yourself deadlines
When setting goals, it's important to be very clear about exactly what those goals are.
If you just say you want to start saving more this year, it's going to be hard to figure out how to get started or know when you've accomplished what you set out to do. But if you say you want to increase your 401(k) contributions from 6% of your income to 10% of your income, this gives you something measurable to work towards.
To set specific goals, determine how much money is required and a timeline of when you want to meet the objective. From there, you can break down the goal into how much you need to save each day, each week, or each month -- depending on what works for you.
3. Stick to your new routine for at least 30 days
Once you know what your goals are and have identified the steps you need to take to achieve them, it's time to list out some specific behavioral changes you'll make in order to be successful. You can't just hope your goals will be accomplished -- you need to take concrete steps to make it happen. This means actually making sustainable changes to what you're currently doing with your cash.
Most experts agree it takes around 30 days for a habit to become a permanent part of your routine, so whatever money-saving habits you decide to adopt, be sure to do them regularly for at least a month. This could mean that you make a habit of packing your lunch and batch-cooking dinner every Sunday for the whole month of January.
Once you see how much you save, hopefully you'll continue to follow your new money-saving practices all year long.
4. Regularly track your progress so you can stay on track
Finally, it's important to make sure you're on track to accomplish your resolutions. Schedule regular dates on your calendar once a week or once a month to check in on your progress. Keep account of your efforts on a spreadsheet, in an app, or using some other technique that works for you.
And if you see you've gotten off track, go back to the drawing board and find some new habits you can adopt to get back on course and make sure you can accomplish your goals before 2020 comes to an end.
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