Save more, spend less and pay off debt are popular New Year’s resolutions—and perhaps the ones most likely to fall by the wayside a few weeks into the year when reality sets in and expenses derail plans. But an early-in-the-year setback, like paying your health insurance deductible or the credit card bills after a costly December, doesn’t have to knock you off course.
Make Your Goals More Specific and Realistic
Broad resolutions like “I want to save more this year” can be a helpful starting point, but they make it hard to track your progress. Keeping a specific goal in mind—like a wedding, debt payment or buying a house—puts a dollar amount to your financial goals and gives you something concrete to work toward.“My goals are more tangible this year,” says Yasmeen Alshabasy, a Los Angeles-based clinical study assistant. “They can be measured and quantified, instead of the symbolic plans I’ve made previously, like gaining more financial freedom.” She has an exact savings goal for the year and plans to use an Excel spreadsheet and tracking app to monitor her weekly budget.
Also, make sure goals are within reason and won’t cause added stress. It may be tempting to set an ambitious savings target, but stay within a range that makes sense for your income and regular expenses.
Set Up Regular Check-Ins
Checking in formally on your finances only once a year can be overwhelming. Setting up midyear, quarterly or even monthly appointments with yourself or your financial planner—if you have one—can help keep you on track and allow you to change your goals if necessary.Becker and his fiancee, for example, are planning a dedicated midyear check-in.
“Knowing that’s coming takes a mental weight off,” he says. “We’re trying to save a relatively significant amount, but not so significant that we can’t make adjustments if we find we’re behind halfway through the year.”
Offload Some of the Work
Keeping track of your financial progress throughout the year can add an unnecessary mental load to your plate. Consider implementing some automation to your money goals, like a monthly account transfer you can set and forget.“We’ve set up automatic deposits into our joint savings account,” Becker says. “That way, we don’t have to make active decisions about what to save every month.”
For credit card debt, you could schedule monthly payments that are bigger than the minimums. Taking that responsibility off your hands in advance can reduce day-to-day financial stress and make it more likely for you to meet your targets.
For managing large investments, hiring an expert can be worth the cost. Look for a licensed, registered fiduciary, preferably one who is fee-only, meaning they don’t make commissions by selling you financial products. Finding a certified financial planner, or CFP, is a good place to start.
“It’s worth it for me to pay a wealth management team to handle my investment portfolio—especially given the economic climate,” says Ashley Porras, a Cambridge, Massachusetts-based business development manager at a biotech company. Her main financial goal this year is to preserve her savings during the current market downturn and minimize future losses.
Be Flexible
It can be tempting to make drastic changes every January and set extreme resolutions for your finances. But a less-stringent, more-forgiving approach could be more sustainable, especially when unexpected expenses come up.Consider setting monthly limits for “wants” and rolling discretionary spending over to the next month if you surpass the limit instead of eliminating wants completely. Most importantly, don’t abandon your goals after a setback: Overspending by $100 is still better than overspending by $1,000, and making an effort adds up.
“Flexibility and adaptability are key,” Porras says. “Especially with factors outside your control, it’s far better to understand the variables and work to create a solution than being passive and accepting defeat.”
