5 Money Resolutions To Ditch This New Year — and 5 To Try Instead
Written by
Sarah Li Cain
Edited by
Jenna Klaverweiden
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Maybe you’re thinking of setting ambitious financial goals come January. You know, the usual, like spend less, save more and make a ton of money. The truth is that many who set lofty goals end up seeing their resolutions fizzle by February because it’s hard to keep momentum or because their goals are too rigid, vague or unrealistic.
Set yourself up for success by swapping these money resolutions with habits that you’ll actually stick to and will support your long-term financial health.
1. ‘I’ll Stop Spending Money on Anything Nonessential’
Cutting out all nonessential or “fun” splurges might sound like a great way to save money fast, but deprivation will likely backfire on you. Not being able to spend the money to enhance your life this way could lead to burnout, which could lead you to rebel and spend more than you had expected. That, or you’ll feel guilty each time you spend on something small that might bring you joy.
Instead, try to plan one intentional splurge each month. Allowing yourself small and guilt-free spending will help make it easier to stick to your overall financial goals. You’ll be able to find a more healthy balance between saving and living your life. That way, your budget won’t be seen as a punishment.
2. ‘I’ll Save $10K This Year, No Matter What’
It’s fine to have lofty goals. However, ones that ignore your real life, like fluctuations in income, financial emergencies or changes in everyday spending, could derail your goal. And if you can’t hit your intended destination, you might feel like a big failure, even if you’ve made progress toward your savings goal.
Instead, consider setting aside a certain percentage or a set amount of your paycheck each month and having that automatically transferred to a separate savings account. That way, you’re making a goal and saving toward it, but it doesn’t feel too daunting.
Plus, committing to saving a percentage of your income, for example, means that your goal will change with your paycheck. It’s more flexible and you know you’re working toward more savings over the long term.
3. ‘I’ll Pay Off All My Debt This Year’
Again, if you set your sights too high, it could lead to a lot of disappointment. Focusing only on paying off all your debt means you’re not looking at the progress along the way. Plus, you may be ignoring other equally important goals, like saving for an emergency fund.
Instead, focus on a strategy that can help you pay down more of your debt, even if you’re not going to be debt-free. For instance, you can focus on paying off the debt with the lowest balance, or pay off the one with the highest interest.
Doing so will give you a way to see progress in a more visible way and help keep you motivated.
4. ‘I’ll Track Every Dollar I Spend’
While detailed expense tracking can absolutely work, for many people it can feel exhausting and hard to maintain. Tracking this way often goes out of the window. Plus, it can bring on feelings of guilt or other negative feelings if you’re wondering whether you’re doing the “right” thing with your money.
Instead, come up with a more flexible way of tracking, like the 50/30/20 rule, where you spend 50% on essentials, 30% on wants and 20% for savings. Or come up with a guideline where you set aside savings first, and then the rest is fair game.
These methods focus on more broad “rules” and categories instead of getting too granular. It can make budgeting easier for you to manage.
5. ‘I’ll Boost My Credit Score by 100 Points’
Credit scores do go up, but setting a very specific goal of how much you want your score to go up in a year may not be achievable. And if you’re trying to significantly raise your credit score quickly, you may feel frustrated when it’s not going up as fast as you’d like.
Instead, focus on the habits that can raise your credit score, like paying your bills on time, not maxing your credit cards, and regularly monitoring your credit report and disputing any errors. That way, you’ll see steady improvements to your score over time.
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