With 2015 just getting started, plenty of people will be making resolutions: the time-honoured tradition of vowing some aspect of self-betterment for the year to come.
As it turns out, most are not very successful. Only about 10% of people meeting their new year’s goals. Also interesting, the overwhelming majority of resolutions are about health/fitness or personal finance. In order to help you beat the odds financially Tyler Welch, the host of Common Cents on Monday’s at 1:30 p.m. is giving some resolutions worth making and tips for success. Check out the info below or click the Mixcloud link to listen to the whole New Year’s episode of Common Cents.
Before getting started
Most people’s resolutions fail because they are not specific enough or your will power is not strong enough. Keep these in mind before setting up your goals for the year:
1) Don’t make fluffy, vague resolutions
A resolution like ” I want to save more” or “I’d like to spend less”. It too wishy-washy and you’ll likely fail. Instead make your goals specific. Say something like “I’ll put away $5000 by the end of the year”. Then create your monthly plan to make that goal possible.
2) Take willpower out of it: automate your habits
If you’ve got a savings or debt-based resolution, it can be difficult to be diligent every month. Don’t less a potential lack of will power ruin your strategy. Automate your paycheck or bank account to put your savings into the right account every month. It will do it without you even thinking about it and won’t give you a chance to spend the money.
Now, some great resolutions to think about
1) Set up an emergency fund
This is one of the most crucial things you can do to set on the path to financial success. Get yourself a savings account with $1000 dollars or one month’s expenses (whichever is higher). This way, when something happens, it’s only one emergency and not one emergency plus a financial one. Having an E-fund frees you up to pay down tons of debt, saving junkloads of money for the future, or spend on things like travel and degrees.
2) Draw up a budget
Do it! A monthly budget is the plan for everything you do with your money. Do you like debt-free life? Enjoy houses, cars or boats? Like travelling, retiring early or give to charities? All of these great things come from a monthly plan. Get on it.
3) Leave the credit card at home
Make the choice to migrate your credit card from your wallet/purse to dusty drawer somewhere at home. Keeping the credit card out of reach when you’re out shopping will curb your impulse, out-of-budget purchases and could grow you to a place where you can just cut it up. Goodbye high-interest debt! \
4) Start thinking about (and saving for) retirement
I know, you’re young. Life is breezy, full of possibilities and lacking in worries. What business does 22-year-old you have worrying about 67-year-old you? Right? Wrong. Most experts estimate that you need to amass about 20 times what you’d hope to live off of annually as a retiree. If you’re hoping to live off of $75,000 a year, you’ll need to save up $1.5 million before you can retire. That going to take a while. Start early, save the headaches later.