But over the years I’ve realized that making smaller commitments makes it easier to follow through on them. Resolutions are supposed to be helpful not stressful!
The smallest of changes can have the biggest of impacts on your life, especially if you can turn them into habits! Financial resolutions are one of the most important ones you can add to your list.
We use money everyday to lead our lives – from keeping a roof over our heads to enjoying dinner-time with family and friends. Therefore, we thought we’d help you come up with some resolution ideas!
Here they are:
1) Identify your emotional triggers to spend money
What sets your mind off to spend? We all have spending triggers, sometimes to relieve stress through shoe-shopping or filling our stomachs more chocolate than needed. Hey, we have all been there, and that’s OK. But it is more important to figure out what your triggers you to spend money. Many money-triggers are closely associated with your emotions. Sometimes, we buy things giving into our emotions, and its most important to be aware.
For example: when I become self-conscious about my physical appearance, I go out and splurge on a new outfit to make myself feel better. If shopping is a key reason for you to overspend try going on “shopping diet” for a month.
- “I will not spend when I’m depressed or in order to feel better. I’ll divert my mind to __________ instead.”
2) Talk about Money with family and friends
Talking about money shouldn’t be a taboo, but it often is. Make financial conversation part of your every-day. Money is essential, and we use it everyday – so why do we avoid talking about it? It is because money is so close to our emotional health. Having healthy conversations about money can help relieve you of stress, misunderstandings, and resentments.
Discussing money with your children is an essential part of raising them. From spending habits to moral conduct – money has a far-spanning reach of our everyday behaviour with ourselves and our loved ones.
3) Set SMART goals
Setting goals with achievable targets and measurable progress is the best way to find success. When we become specific with what we want, we are able to better focus our attention to making our aspirations a reality. The idea: Be Clear!
Setting big goals can become really overwhelming. Setting small goals for yourself each month can help you to achieve a bigger goal by end of the year. Goals should be Specific, Measurable, Attainable, Realistic, and Timely.
- SMART Goal: “I will save $500/month till Dec 31st, 2018 and beyond”
Avoid Financial Pitfalls by Finding Your Blind Spots
4) Make a list of your unnecessary expenses
Review your spendings for the past year. You know those little things? They can add up to thousands of dollars per year! Cutting those unnecessary expenses can help you save more money or spend it where it is really needed. (You can look through your old credit card bills to figure it out!)
Once you figure out where you’ve spent unnecessarily, you can be more mindful about what you spend on in this coming year. Make a list of 3-4 unnecessary expenses you have incurred in the last year.
- You drink Starbucks coffee every morning before going to work . Try giving up having Starbucks coffee for a month and drink coffee at home instead. David Bach popularized the term “Latte Factor” to symbolize the high cost of small, periodic spending. Latte Factor® is based on the simple idea that all you need to do to finish rich is to look at the small things you spend your money on everyday and see whether you could redirect that spending to yourself. Putting aside as little as a few dollars a day for your future rather than spending it on little purchases such as lattes, bottled water, fast food, cigarettes, magazines and so on, can really make a difference between accumulating wealth and living paycheck-to-paycheck.
Latte Calculator – https://davidbach.com/latte-factor/
5) Automate your savings and bills
Automating your finances is such a great way to save money. Put your personal finances on autopilot so that you never miss a payment and save money without effort!
For example, let’s say you plan to save 20% of each paycheque, you can set up an automatic deduction for each pay period. Every time you get paid, your savings will automatically get squirrelled away!
- Here’s how you can automate your finances: