Making smart financial resolutions for 2020


Making financial resolutions each year is an exercise almost all of us do. Unfortunately, we often make vague and hard to measure resolutions. Without specific goals, follow thru is very difficult and without actionable goals, resolutions tend to never move past the proclamation stage.

How do setting actionable goals help improve the chances for success?
An actionable goal will require you to develop a very specific plan, for example if you want to save $1,200 this year, you know that you need to find $100 in savings each month. To find the $100, you will be forced to make changes. If your goal was that you wanted to save more this year, likely that is where it will end.
What is an important retirement resolution that we should set this year?
If it involves your 401k possible goals include:

  • Increase contribution percentage by 1% or;

  • Increase by the amount of your raise

What is a smart savings resolution to set for 2020?
Saving for major expenses is a great resolution and the actionable goals could be:

  • Save $100 per month for this year’s holiday expenses

  • Save for 100% of this year’s vacation expenses

How can we set actionable goals for reducing debt?
It might start with focusing on paying down credit card debt, two very good options for goals include:

  • Pay down credit card debt by $1,000 each quarter, or

  • Pay off one credit card each quarter

How can we incorporate changing our financial habits into resolutions?
One area could be to start using good financial habits and the actionable goals might include:

  • Use at least 5 coupons on each grocery shopping trip, or

  • Always wait 24 hours before purchasing something over $100

What is the best way to monitor our success with our resolutions?
The best way is to actually make these written goals and track the progress each month. It is important to measure often because waiting too long increases the chances that you will decide to give up on the goal. Measuring progress allows you to reset the goal or change your plans on how you will reach the goal.

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