This post was written before Christmas but was not published until the new year. It's actually interesting to read and think about new year's resolutions a few weeks after the fact--does anyone remember what they were?
Some financial new year’s resolutions
New year’s resolutions are notoriously short lived. When thinking of one’s finances, it’s foolhardy to count on a midnight wish to bring about any real change in your situation. That said, if you have run into trouble or just want to take a more serious approach to handling your money, there’s no time like the present and the start of a new year is as good a time as any to begin. Rather than just hoping things will improve, there are some strategies that will help you turn your resolutions into real action.
Perhaps you’ve heard that goal-setting is more effective when you follow the acronym SMART. If you would like to pay off a credit card, say, just the vague notion that you would like to do so doesn’t mean that you will. You stand a better chance of achieving your goal if it’s specific, measurable, attainable, relevant and time-based.
In our example, paying off a credit card won’t happen unless you make a plan to do so. Be specific. How are you going to come up with extra money every month to pay down the debt? Make your goal measurable: how much, realistically, can you put towards that debt every month? This goal must be attainable in that if you put every extra cent against your credit card you may end up having to use it again to cover expenses. Remind yourself why this goal is relevant to you. It may seem painful to cut back spending or take on extra work to pay off the card, but doing so is saving you the interest and allowing you to put that money towards other bills, savings or recreation. To actually succeed, you must give yourself a deadline—the time-based portion of this goal is to decide when you want the card paid off in full and then follow through.
Don’t set yourself up for failure. Have a realistic look at your situation and note areas where you think you can make some positive changes. Perhaps you would like to spend less on groceries. Maybe this is the year you quit smoking or use your treadmill daily. Whether your focus in the new year is on your finances, your career, your health or your relationships, you must keep your goal in the forefront of your mind to succeed. Tweaking your routine ever so slightly can contribute to your accomplishment. Park further away from the door in large parking lots and take more steps in a day. Boycott the drive thru and bring your own travel mug of coffee from home. Calculate how much you save and put that amount towards a debt.
How much time does the average person spend making funny faces on snapchat or surfing the Internet in a day? There’s a multitude of more useful things to do with your time. Rather than reading the latest celebrity gossip or checking Facebook, how about resolving to learn more about personal finance this year? If you feel you don’t have the time, try leaving your cell phone on a high shelf and retrain your attention span not to reach for it every ten minutes. You might be surprised how quickly you can read a book or magazine when you stop distracting yourself.
Track every penny
If there is one new year’s resolution that will absolutely help you get control of your money, pledge to record every cent you spend. The old expression “take care of the pennies and the pounds will take care of themselves” is as relevant today as it ever was. There is no way to put a dent in your debt load if you have no idea where your money is going every month. While your cell phone is on that high shelf, go through your bank and credit card statements and get a good look at your spending. You may be surprised how much money is trickling between your fingers.
Some problems are bigger than a new year’s resolution can handle. The stress of job loss, debt, making the mortgage and, frankly, paying for Christmas can be too much for even the strongest to bear. If you or someone you know is beginning to feel isolated and like there’s no hope, get help. This is a terrible time for some, but with support you can weather any storm. Contact the Alberta Mental Health Helpline (toll free in AB) 1-877-303-2642 if you feel you can no longer cope. Contact Credit Counselling Canada and arm yourself with trustworthy, professional financial advice. Knowing what needs to be done can’t be as bad as worrying about the unknown. Let 2017 be the year you take control of your future, whether you make resolutions or not.