Many of us make New Year’s resolutions but few of us actually keep them! That’s okay … the more often we think about lifestyle improvements, the more likely we are to actually implement some. Here are three financial resolutions to consider.
Face Financial Facts
Spend the time to get a full picture of your financial situation. This includes debts, assets, monthly spending, and income to debt ratio. Go one step further and consider financial mistakes you made last year. Acknowledging them is the first step in not repeating them! Once you have a full picture of your financial situation, pick one or two things to improve this year.
Save 10 – 15% of Gross Income
It doesn’t matter what you save it for… it could be for an emergency fund, your retirement account, or even a vacation. The trick is to commit to taking a portion of earnings off the top for savings. The sure-fire way to accomplish this goal is to automate the savings. Set up a recurring monthly transfer from one bank account to another established just for savings, or have the money go straight into a TSFA or RRSP. Try it for three months. If it’s too much of a financial strain, cut back the amount. But more likely, you will be able to adjust your regular spending so that you don’t even notice that this money is being redirected.
Create Healthy Financial Habits
Habits are simply things that you do regularly and repeatedly. Research done by the University College London showed that it takes an average of 66 days to create a habit… so that’s how long you have to commit to really trying. Some healthy financial habits to consider are:
- Subscribe and listen to a personal finance podcast. It can be daily or weekly.
- Read a personal finance book. Committing to one-two pages per day is a good start.
- Commit to one no-spend weekend per month. This means eating in, not going to the mall, perhaps having friends over for a game night or actually tackling those minor but annoying home improvement projects.
Whatever you decide to do, write it down and post it at your desk or on your fridge. Daily reminders may help build the positive behaviours you’re hoping to achieve.
Good luck and Happy New Year!
