New Year's: Ring it in with a Plan

New Year's: Ring it in with a Plan

Resolutions may seem intimidating, especially when they are financial resolutions. Trying to resolve in one day to overhaul any or all aspects of your finances can be a nightmare. However, when you break down your resolutions into goals that are accomplishable, financial resolutions aren't quite as scary. Let's look at some of the best ways to make financial resolutions in the new year.

Think Big

The first step to making any resolution is to make one big goal. But making that goal can seem absolutely intimidating. In fact, it may seem impossible. Say, for example, that you wish to pay off your $10,000 credit card by the end of the year. When you decide to pay off the one big credit card balance, you might be scared that you cannot accomplish it. However, if that is what you truly want to accomplish this year, you very well might be able to do it if you put your mind to it. So think big for your initial resolution.

Break it Up

Once you have your big resolution in place, you can work on the finer details. This step can help break down the intimidating goal to more accomplishable mini goals. In our credit card payoff example, we would simply break the payoff down into monthly goals. So if we divided $10,000 by 12 months, we can see our monthly credit card payment goal is $834 per month. If you're paid bi-monthly, this goal can be broken down to $417 per paycheck. This goal seems much more do-able than $10,000...but even the smaller goals may seem intimidating.

Brainstorm Alternative Solutions

If your broken down goal still does not fit your budget, your dream of paying off that large credit card by year's end doesn't have to be crushed. You might simply need to think about ways to bring in side hustle cash. Taking on a second job, setting up a website or selling craft items on Etsy are just a few ways to bring in some extra cash. Once that extra income is in your hands, you could possibly be able to pay off the credit card even more quickly than you first thought.

Go With the Flow

When the credit payment is going well, it can be quite easy to stay on track. On the other hand, when the extra payments just aren't quite cutting it, it could be tempting to give up on your goal. If this is the case, remember that cash flow doesn't always go according to plan. Rather than give up on your goal, reevaluate your progress and goals. You might need to increase your side hustling or decrease your total payoff goal. It's important to not consider changed goals a failure, though; sometimes life just gets in the way and adjustments must be made.

New Year's can be the perfect time to re-evaluate your financial goals, and making financial New Year's resolutions can go much more smoothly than it may first appear. If you think big, break goals down, brainstorm and go with the flow, you can accomplish almost any goal you put your mind to.

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MoneyCone's picture

MoneyCone wrote:

Mon, 01/02/2012 - 14:20 Comment #: 1

Breaking a big goal into manageable chunks is more practical. Actually, I find that effective for any big task, not just new year goals!

femmefrugality's picture

femmefrugality wrote:

Mon, 01/02/2012 - 18:05 Comment #: 2

Great tips! I love the attitude of flexibility!

Christa Palm's picture

Christa Palm wrote:

Mon, 01/02/2012 - 20:23 Comment #: 3

MoneyCone, very true: breaking up anything into smaller goals can help make your task seem more manageable.

Femme Frugality, I think flexibility is key! Life happens, and rolling with the punches can help make it easier to accomplish or even reassess goals.

retirebyforty's picture

retirebyforty wrote:

Mon, 01/02/2012 - 23:22 Comment #: 4

Breaking big goal into smaller more manageable chunks is a great idea. It's difficult to make a dent on a big number like $10,000, but $800 is much less intimidating. Happy New Year!

Christa Palm's picture

Christa Palm wrote:

Wed, 01/04/2012 - 16:21 Comment #: 5

Retire by Forty, I hope you had a wonderful New Year's as well!