Money resolutions sound more painful than the office Christmas party. But…just like showing up to see the boss wear the fuzzy hat and tell lame jokes, money resolutions are important to your future.
But resolutions are tricky.
The research says 80% of New Year’s Resolutions fail by February.
Which categories go down in flames the fastest? 1. Healthy eating and 2. Improving our finances.
Making a money resolution or getting your financial “house” in order is second only to losing weight. But if those resolutions are #1 and #2 that means they are important to a lot of us. So it pays to take time and sort out how to improve the success of our resolutions.
The experts say in order to not be a part of those statistics you should break down your resolution into little steps.
We love that idea on both fronts: smaller money resolution “bites” that are manageable along with smaller bites of our favorite pizza. (Have you ever met a pizza you didn’t like? Same with us.)
We probably won’t be much help on the health resolutions (see our comment on pizza), but money and relationships are our passion so we’ve thought of a few tricks to make your money resolutions pay off this year.
Break your money resolutions into three categories and choose one resolution from each category (if you complete it and want to go for two, do it!):
Profitable Money Resolutions:
Money Resolution #1 – Improve Your Finances
There is an infinite amount of “good things” you can do to improve your financial situation, BUT that endless list is sometimes where we get overwhelmed and just tap out.
This year choose one financial resolution you’d like to focus on. If you pick too many large goals you are more likely to feel failure when you don’t complete them. Who can save for a house, start a business, and eliminate thousands of dollars of debt in one year?
Pick ONE helpful, doable resolutions with a good impact on your new year.
- Automate your savings. We recommend an app like Qapital where you can set it to round up your spare change on a purchase to the next dollar amount and it moves that money into an FDIC insured account.
- Evaluate your life insurance. Do you need more? Is there a better product? Are you over-insured?
- Conquer a percentage of your debt. Pick a fun number, i.e. 77% or 51%. Get real with your debt responsibilities and then chunk it up. Remember to celebrate each month as you near your goal (track your progress on your fridge or your bathroom mirror so you can watch that debt shrink!).
Money Resolution #2 – Invest in Your Relationship
We may both be financial planners, but we think your relationship is more important than your money. So make sure you invest in that priceless relationship this year.
- Choose honesty. This year make a resolution to say, “I am not going to tell money lies or fudge the truth to my partner. This means no secret accounts, hiding of money, or lying about expenses. Resolve to be 100% transparent with one another. We call lack of financial honesty, “Financial Infidelity”.
- Budget for a weekly date night. Date nights are so important to keep your relationship “young”. Allocate that money and think of those funds as a “use it or lose it” account. If you put money aside the person who never thinks you can afford it can’t argue with your weekly plans. Invest in each other.
- Get your financial papers and accounts pulled together so both know where it all is. If something were to happen to one of you it is important that everything is easily accessible, i.e. birth certificates, insurance documents, passwords, etc.
We know we said to choose ONE of from each category, but we’d really love it if everyone would honesty AND another item to improve their relationship this year. Thanks!
Money Resolution #3 – Educate Your Kids About Money
Choose an area of your finances to educate your children on, depending on their ages. Any age is a great age to teach your children something useful about money management. They’re never too old to learn (regardless of the eye rolls).
- Open a savings account or a 529 or an IRA. Educate them on the savings vehicle, how to make it grow, and the potential future uses of that money.
- Buy a stock that interests them and teach them how to track it. Some young ones may really enjoy investing, while others not as much. Every person in your house views money differently. And that goes for your kids too.
- Teach them how the cell phone bill works. We have a 14 and 16 year old and this year we are going to teach them how to analyze the bill because they don’t realize data and minutes make a difference. We may even change Cole’s name to “Mr. Data” because he takes so much of it.
Pick and choose 3 resolutions this year. You can do it! Pick a winner because any forward progress you make pays off.
Pick smaller goals this year. Instead of I resolve to “not be in debt” this year, go smaller and more specific.
This is your year for better finances, relationships, and the opportunity to arm your children with money management skills and education. The time you invest will pay off.
Make it happen!