January’s Gone: Here’s How You Can Still Make Financial Resolutions You’ll Keep All Year

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It’s already the end of January 2021, and though you likely had the best intentions, it’s quite possible you haven’t made any headway on your financial resolutions — or perhaps you haven’t even decided what they are yet. The good news is there’s still time to make attainable goals and follow them. GOBankingRates talked to experts in financial planning to help you make a plan for success in 2021.

Find Out: How To Accomplish Your Resolutions on a Budget

1. Make SMART Goals

The caps lock wasn’t just for dramatic effect. SMART stands for specific, measurable, achievable, realistic and timely goals. Matthew T. Gray, a financial advisor at Personal Capital, swears by this method for his clients. Here’s how it breaks down: 

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Find Out: How To Rebound From a Bad Financial Year: 2020 Edition

Gray noted that though “achievable” and “realistic” might seem similar, they’re slightly different. “Achievability refers to your ability to complete a task, while realistic is how a goal will fit into your larger plans,” he said. 

Start Now: How To Create a Budget You Can Live With

2. Automate Savings

Saving more is a resolution on almost everyone’s list. It seems simple in theory, but if you just plan on saving what’s left over at the end of the month, many times there’s not much — if anything — left to set aside. Instead, Gray recommends setting up automatic recurring contributions to your savings account so you never have to give it a second thought.

“Your future is your most important bill to pay, so make sure you pay that first, and then spend whatever you have left,” Gray said.

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Read: 16 Effective Ways To Trick Yourself Into Saving Money

3. Pay Off Bad Debt

If one of your goals this year is to pay off your debt, it’s most important to pay off credit cards with high interest rates, personal loans and payday loans first. According to Gray, these bills tend to do more damage to your credit score than debt like student loans or mortgages. 

Here are two commonly used ways to pay off debt that Gray recommended. 

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“I think of paying off debt as financial cardio: It helps your finances become leaner and more energized. Once you don’t have the drag of interest payments on your cash flow, you can use that cash in other ways,” Gray said.

Have It All: 50 Ways To Live the Big Life on a Small Budget

4. Review Your Insurance Coverage

You usually review your health insurance elections once a year for open enrollment, but plans like car insurance and home insurance should be reviewed to make sure they still fit your current lifestyle. Andrew Crowell, vice chairman of wealth management at D.A. Davidson, said this review should be done yearly. “A comprehensive insurance inventory with a specialist could not just save in premiums, but also potentially improve or expand coverage through consolidation.”

If you create manageable financial goals and stick to them, your 2021 may be an even bigger success than you’d hoped!

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Last updated: Feb. 1, 2021