Most of us greet the New Year with a list of resolutions designed to make us happier, more productive, and more secure about life in general. Often, these include financial resolutions. Resolving to be a smarter spender, get out of debt, or save for education are all worthy goals, but following through can be difficult. 

These tips will help you make financial resolutions you can actually keep: 

  • Know where your finances stand.

You must have an accurate, honest knowledge of your current financial situation before you make your financial resolutions. This help you know where you need to improve. Things you should know include balances and interest rates on credit cards, amount of money in savings and retirement accounts, loan balances and remaining terms, and any other creditors and amounts owed. It’s also helpful to make a budget so you know exactly how much money you have coming and going each month. 

  • Be realistic.

If you set unrealistic resolutions that are difficult (or impossible) to accomplish, you’re more likely to get frustrated and give up. As you make your resolutions, make sure your situation actually allows you to accomplish them. For example, if you don’t have a lot of leftover income at the end of the month, don’t make it a resolution to save $10,000 by the end of the year. Instead, focus on something more doable, such as saving an extra $50 a month. The same can be said for debt. If you have $15,000 in credit card debt, make a realistic resolution to pay off a credit card or two within the year instead of vowing to pay off all your debt. 

  • Make resolutions based on an ultimate goal.

Your resolutions should be steps you take to help you reach an ultimate financial goal. Think of your ultimate goals. They could be to pay off student loans, get out of credit card debt, save for retirement, or have a certain amount in your children’s education fund by the time they turn 18. Once you have these end goals in mind, make yearly resolutions that lead you to these goals. For example, if your goal is to get out of credit card debt, your resolutions could include paying off half your credit cards. If your goal is to save $20,000 for your child’s education, you could make a resolution to contribute $1,000 each year of your child’s life to an interest-bearing account.  Having an ultimate goal in mind allows you to make more definitive resolutions. 

  • Have a plan.

Resolving to do something is only half of it—you must have a plan that helps you reach your goal or resolution. Once you have a list of financial resolutions, sit down and develop a plan that makes it happen. For example, let’s say you want to save $5,000 by the end of the year. Decide how much you will need to save each month to reach this goal, then map out what you will need to do. This might be include having money directly deposited to your savings account each pay period, or cutting back on certain monthly expenses and putting the money towards savings instead. 

  • Remind yourself of your resolutions often.

A year is a long time, and it can be easy to lose sight of your resolutions as time goes on. Reminding yourself of your resolutions often can make them easier to stick to. Write down your resolutions and put them where you can see them. You can keep a copy in your wallet, for example, so you can see it before you’re tempted to spend. Reminding yourself of the success you have can also be motivation to stay with your resolutions. If you resolve to pay off a credit card, watching the balance steadily decrease can be motivation to continue paying down your debt instead of spending the money elsewhere. 

Financial resolutions are crucial to your overall financial well-being. But making them happen isn’t always easy. These tips will help you make financial resolutions you can actually keep. 

Financial ResolutionsDavid Smith, Co-Founder of  PersonalBankruptcyCanada is committed to helping people get control of their debt, make sound financial choices and plan for their financial futures.

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