When it comes to New Year’s resolutions, weight loss and financial goals consistently top the list. In fact, a December 2015 survey by Allianz Life Insurance Company of North America revealed that 29% of respondents prioritized financial stability in their resolutions, second only to health and wellness.
“The New Year is definitely the hot money time,” says Karen Richardson, a money coach for Money Coaches Canada in Ontario. The start of a new year often feels like a fresh beginning, making it the perfect time to focus on your finances.
However, sticking to resolutions can be challenging. A 2013 article from the Toronto Star reported that only 19% of people who made resolutions in 2012 stuck with them for the entire year, while another 19% didn’t even make it through the first day. But with the right planning and a few strategies, you can make financial resolutions that last. Here’s how to do it:
1. Track Your Spending
The first step to improving your finances is understanding where your money goes. For a couple of weeks, keep a record of every penny you spend, including fixed expenses and bills. This will give you a clear picture of your spending habits.
2. Get the Big Picture
Once you’ve tracked your spending, sit down and review the data to see where your money is going each month. Are you relying on credit cards for everyday expenses? If so, and you’re not paying them off immediately, it’s a sign that your financial situation needs adjustment. If you’re often surprised by your bills or feel unprepared when taxes are due, it’s time to rethink your financial plan.
3. Create Your Resolutions
With a clear understanding of your finances, it’s time to set resolutions that target problem areas. Be specific with your goals. For example, if you’re overspending on groceries, resolve to shop at discount stores or cut your grocery budget by 25%. If you’re worried about saving for your children’s education, set a deadline to open a Registered Education Savings Plan (RESP) by March 1. The more specific your goals, the more likely you are to achieve them.
4. Make It Easy on Yourself
Many resolutions fail by February because they’re too ambitious or require too much willpower. Instead, aim for small, manageable goals that are easy to maintain.
For example, if you dread opening bills, resolve to open every bill as soon as it arrives. This simple habit can help you avoid late fees and protect your credit score. If cutting down on grocery spending is your goal, start small—reduce your spending by 5% one month, then gradually cut back more in the following months.
For savings goals, like building an RESP, set up a feasible plan and make it automatic. Start with a small monthly contribution and increase it when you can. Automating your savings makes it effortless—you just set it up once and forget about it, as Richardson suggests.
The simpler the resolution, the more likely you are to stick with it. Successfully achieving a small goal can give you the confidence and momentum to tackle more significant challenges. Remember, achieving even a modest goal by the end of the year is far better than not achieving any goals at all.
