With the first quarter of the year almost in the books, it might be time to look at those resolutions that you formulated at the start of the year. Many of our New Year’s resolutions may have gone by the wayside. If some of those forgotten resolutions are financially related there is still time to get them back on track.
What makes the first quarter a good time to review our progress?
Probably the biggest reason is that so much of the year remains that most resolutions can be achieved without making major adjustments to our financial plans. Waiting even until the middle of the year will often require drastic changes.
Why do so many financial resolutions end up forgotten before the end of the first quarter?
Most often it is because we tend to set very broad and ambitious goals that are very hard to measure and track. For many, before they even get started they are doomed. Broad goals without measurements are just really good statements but tend to provide little in the way of a roadmap to success.
How do we get back on track with our financial resolutions?
First, start with resetting your goals into measurable action steps. For example, instead of just setting the goal of paying off your credit card, develop an action plan that might include not using the card and paying $100 more than the minimum payment each month. These actions are easily tracked and provide a roadmap to accomplish the overall goal.
What if the problem is not saving enough?
Not being able to save as much money as we want is a common problem. The issue is that we don’t identify specific expenses to reduce so that we have money to save. Recurring items are a great place to look for reductions perhaps the gym membership you never use regularly or the full access TV package your never watch. Take those specific savings and deposit them automatically into your savings account and you will be surprised how quickly your account grows.
Why is setting a net worth goal so important?
Your net worth is the best barometer of your overall financial picture because it encompasses both savings and debt. Your actions on both sides of the ledger sheet have an impact on your net worth and can tell you whether your financial picture is improving or declining very quickly.
Are there any other tips for achieving your financial goals?
A very important one: reward yourself for achieving significant milestones towards a major goal. For example, when you have lowered your credit card debt by half, give yourself half of the next month’s extra payment as extra spending money for that month. Celebrating success is an important part of keeping your resolutions on track.