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Losing weight, exercising more and improving finances.
According to an article by The Motley Fool, those are the top three resolutions people are likely to make this year. Sound familiar?
Though a new year generally brings with it feelings of renewal, jokes about the inevitable demise of lofty New Year’s resolutions typically follow close behind. Some have even gotten to the point where they no longer make New Year’s resolutions because they see them as a waste of time.
But they don't have to be.
For the most part, the best way to keep motivated is to make your resolutions as structured as possible. No matter where you are in the broad spectrum of financial security, it’s important to always keep track of where you are and where you want to go. The following tips can help you make 2014 a great year for your financial plan.
Evaluate your situation
The end of the year is always a good time to take stock of how you’re doing financially. But if you haven’t done it yet, avoid the temptation to push it off. Daily life has the power to break your concentration and cloud your judgment, and you could end up getting stuck in the trenches rather than taking command.
Taking a step back takes time, but it can help you to see the big picture of where you’re doing well and where you need to focus your efforts going forward. If you haven’t been keeping track of your expenses and savings, it’s going to take longer to see the trends, but you should know generally where most of your money goes.
If you have been keeping track, the numbers will help you better establish what your strong and weak points are. If you already have goals in place, assess where you are in regards to them and what you have left to do.
Determine your priorities
Believe it or not, your priorities may change often over the course of your life. You may have experienced new things recently that have changed your priorities, whether it’s marriage, a new baby, working with a charity or whatever else. If you’re married, work with your spouse to determine what your priorities are. This is important because those priorities may be different than those still living the single life. Establish what’s most important for the both of you and then talk about your individual priorities. What are you passionate about? That should be a priority.
After you’ve established those, review all of the things you spend money on that don’t contribute to those priorities. Things like cable television, high car payments and eating out every day may be distracting you from what’s most important. Everyone has different priorities, so it’s important that your behavior reflects your personal goals, not someone else's.
Set goals and be accountable
After you’ve set your priorities, give yourself a way to measure your success by setting concrete and reasonable goals. It could be a savings goal for a vacation or for your emergency fund. Or it could be a certain amount of debt you want to pay off. It doesn’t really matter what your goals are, as long as they're reasonable and help you achieve your overall goals for financial stability. It’s also important that you put them somewhere prominent enough to help you remember them.
Schedule monthly sessions with your spouse to follow up on your progress and to adjust to any circumstances or goals that have changed. Follow up on your expenses weekly to ensure that your behavior is aligned with your goals.
Create a budget