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Making realistic financial resolutions for 2018

Many people are in the habit of making resolutions for the New Year and financial resolutions are often included. The key is knowing if they are realistic or just another resolution that will be forgotten before Ground Hog Day.
What are good financial resolutions to consider for 2018?
Four good ones are – reduce debt, increase retirement savings, grow the emergency fund and develop a  budget. These all have long term financial impacts that are positive. And for most people, these are the four areas of concern.
Why do most financial resolutions fail?
Because we don’t turn these financial ideas into a specific goal.  Often people just make general statements like those that I made above and they never develop actionable items to complete. Action items are the ways we plan to reach our goal.
Are there other reasons that resolutions fail so often?
Some people go completely the opposite and set unrealistic goals that are more hope than reality. Or they set a goal but don’t monitor their progress until the end of the year. Both lead to financial resolutions being forgotten and not attained by the end of the year.  Frequent reviews lead to better accountability.
What are ways to improve your chances of achieving your financial resolutions?
Be specific about the goal and determine how you are going to make it happen. For example, you might have a resolution of growing your savings by $25 per week using the savings you get from using discounts, coupons and loyalty cards.
Are there other ways to improve your chances for success?
One of the best ways to increase your chances for success is breaking a large annual goal into monthly or quarterly goals and then measuring your goal attainment frequently. For examples, take an annual goal of reducing your credit card debt by $1,000 and make it a $250 per quarter goal and track your progress monthly by adding up your credit card debt.
What if you only want to have one financial resolution, what should it be?
The most important financial resolution if there is only one is increasing your net worth. Tracking your net worth encompasses almost every aspect of one financial life. And the opportunities to increase your net worth are plentiful so the chance of achieving the resolution is greater. Less debt, more emergency savings, increased retirement funds, buying appreciating assets all increase your net worth.

Posted: 1/8/2018 with 0 comments

Categories: Budgeting, Money Matters, Planning, Retirement, Saving, Spending

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