Tips for creating and fulfilling financial resolutions in 2018.
As the year begins, many people are making goals, or resolutions, in an effort to have a more positive and fulfilling year ahead. Whether it’s creating new, healthy habits physically or financially, these goals don’t need to be difficult to fulfill.
Scott Cadwell, founder of Cadwell Wealth Management Group, says there are many easy ways for individuals to get on track financially in 2018. His suggestions for easy-to-keep financial resolutions include maintaining a budget no matter your stage in life; paying yourself first, or putting money aside for a rainy day before splurging on things you don’t necessarily need; and evaluating your spending needs against your spending wants.
“Consider spending on experiences versus things,” he says. “Memories last forever but the novelty of things fades fast.”
How to Keep Your Resolutions
The most typical mistake that individuals make when it comes to New Year’s resolutions is over-committing to unrealistic goals. The key to success is starting small with an achievable goal that, once met, can lead to the start of a new, slightly bigger one. The success you feel with each small win will give you confidence in reaching those bigger goals in the long term.
Cadwell takes it a step further. He suggests sharing your resolutions and your goals with someone who can help you achieve them.
“I think from a financial perspective, people really need to engage a ‘financial coach,’ if you will,” he says. “Someone who will cheer you on, similar to a trainer for workouts. The coach will help keep you on track to reach goals that may seem a long way off.”
A financial coach can also keep your eye on the prize.
“We help keep people focused on the end goal, which becomes vital when markets are in turmoil, but it can also be needed to prevent speculation and over exuberance,” he says.
If financial goals are important to you in 2018, Cadwell also suggests that you automate your funds. Set up monthly contributions to automatically go to your investments.
“Once on autopilot, the habit is formed,” he says. “This falls right in line with paying yourself first.”
Talking with Your Kids About Money
Being successful with your financial resolutions is not only beneficial to you but it also sets a positive example for your children. Knowing that Mom and Dad can make and reach their financial goals can help your child grow into a financially responsible adult. But this will only happen if you have an open line of communication about finances.
“Parents need to communicate frequently with their children regarding money,” Cadwell says. “Talk to them about your fears and beliefs about spending, budgeting, investing and planning.”
He believes it’s never too early to start, considering today’s world revolves around instant gratification.
“I think the sooner you talk with children about how you got to where you are today and continually restate your values, the more they can develop their good habits,” Cadwell says. “If they don’t learn from you, they will be influenced more by commercials and the financial habits of their peers.”
Having a Successful 2018
It can be difficult to create new habits if you’re not completely ready and motivated to do it. The most successful New Year’s resolution makers look within themselves before deciding on something they are confident in.
Consider writing down your goals so you have something tangible to refer to through the year. You can even break it down into one small goal each month that eventually leads to fulfilling your resolution by 11:59 p.m. on Dec. 31.
Whatever you decide and however you get there, just know that you can do it.
What’s Your Resolution?
According to WalletHub, a personal finance website, 45 percent of Americans make a New Year’s resolution, yet less than 10 percent are successful at keeping it. Since 33 percent of people make financial-based resolutions each year, the site put together a list of its top 10 financial resolutions for 2018. These are our favorites.
- Pay bills right after receiving your paycheck. WalletHub suggests setting up two automatic payments – one right after payday and one several days before your due date – with the second payment helping you avoid interest on purchases made between your first payment and the end of your billing period.
- Repay 20 percent of your credit card debt. Crunch the numbers with a credit card payoff calculator and spread the total throughout the year. Of course, pay more when you can.
- Add one month’s pay to your emergency fund. WalletHub recommends eventually building a fund with 12 to 18 months’ take-home income. Start small by making this resolution in 2018.
- Focus on your physical health. According to WalletHub, the average person spends $4,612 on health care each year. Keep your body strong by eating healthy and exercising to reduce health care costs in the long run.
- Make a realistic budget and stick to it. Once you determine your budget, it’s important to monitor your spending to make sure you’re staying on track.