How To

How to Set New Year’s Financial Resolutions You Can Keep

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Every year it’s the same old story. You start with the best of intentions but somehow never manage to fulfill your New Year’s Resolutions. Perhaps you don’t even know how to get started. When it comes to getting your financial house in order, it’s even more important that you start now, so that you can meet specific deadlines that occur throughout the year. Follow this handy action plan in order to set New Year’s Financial Resolutions you can actually keep.

Common wisdom says that goals need to be concrete and include specific details about how and when they will be fulfilled. If you have gained weight in 2008, don’t just renew your gym membership and make vague promises of getting back to the gym. Instead, sign up for a workout with a personal trainer three days a week. When it comes to your personal finances, a general plan such as knowing more about how much money you are spending and where you are spending it is fine. But you should also set realistic budgets that mirror your actual spending in prior months.

Maintaining good credit is an important foundation for achieving the rest of your financial goals. So start by finding out where you currently stand with a credit report from CreditReport.com or Equifax. If your credit score is lower than 700 due to some outstanding debt, see if you can get those bills paid off as early in the year as possible. Pay the credit cards with the highest interest rate first and then move on to the ones that can be paid off in full so you can start with as clean a slate as possible.

Experts in “getting things done,” agree that it is best to list small, attainable goals rather than go for a lifestyle change overnight. By giving yourself simple tasks that you can even complete in five minutes, once a day, you will make headway over the course of a month.

The following questions are intended to help you set specific, measurable goals within different aspects of your finances. Use a personal finance management tool such as Mint.com to help you gain insights into your spending patterns and come up with answers to these questions. If you have a great suggestion or method that has worked well for you in the past, please comment and feel free to share links to interesting articles and websites that have helped you.

  • What is the category of spending that concerns you the most?

    ___________________________________________________________

  • How much did you average spending in this category last year?

    ___________________________________________________________

  • What was the highest month within this category?

    ___________________________________________________________

  • What was the lowest month?

    ___________________________________________________________

  • What are your spending goals for this year compared to last year. In which categories and months can you lower your spending?

    ___________________________________________________________

  • i.e. if you spent $250 per month going out to eat in 2008, give yourself a target of $125 this month

  • Who is going to hold you accountable? Email or call them now.

    ___________________________________________________________

  • What are you going to do with the amount you save within this category (make it automatic thru electronic debit) – save or give?

    ___________________________________________________________

  • How much money did you have in emergency savings at the beginning of 2008?

    ___________________________________________________________

  • How much money do you have in emergency savings now?

    ___________________________________________________________

  • What is your goal for the end of January for your emergency savings account?

    ___________________________________________________________

  • By the end of February?

    ____________________________________

  • By the end of the 2009?

    ____________________________________

  • Have you seen a recent credit report?

    ____________________________________

    If applicable, list the most annoying and/or severe derogatory item on the report (i.e. collection, judgment, late credit card, car that was reported late but was actually on time).

  • What is one action step that you can take TODAY towards resolving this (i.e. Make an initial phone call, draft a letter to the credit bureaus)?

    ____________________________________

Write down the next action step here and the date that you are going to do this by. Print out our financial resolution worksheet, fill it out and stick it on your fridge while you’re at it.

This should hopefully get you started, and help you to consider other areas of your finances (or other aspects of your life) that you want to transform in 2009. Again, we look forward to hearing your goals and how you plan to attain them along with your own success stories.