Are you planning on growing your savings account, paying down debt, or taking some other action to better your money situation in 2019? If so, you’re not alone.
Believe it or not, a whopping 94% of millennials are planning on making financial resolutions in 2019, according to one survey. But as we all know, most New Year’s resolutions are just passing whims.
So, how do you make yours stick — for good? Take a look at these four tried-and-true tips.
Set SMART money goals
You’ve heard of SMART goals, right? This is a great way to set any type of goal, and it’s especially good for money goals. In short, SMART is an acronym that means: specific, measurable, achievable, relevant, and timely. Here’s a more detailed break-down:
“Be better with money” is a vague, wishy-washy goal. How do you want to be better with money? Do you want to pay off your credit cards? How about save money in an emergency fund? Or, perhaps you want to switch to a better bank account?
The options are endless, but you need to specify your specific money goal in order to actually achieve it.
Similarly, your money goal needs to be measurable. Otherwise, how do you know if you’ve actually succeeded, or are making any progress at all?
To continue with the goals we just mentioned, you could say you want to pay off all of your credit cards. Or save $5,000 in an emergency fund. Or have a new bank account open by the end of January. You see?
We all want to get out of debt and have a million dollars tucked away in the bank some day. But for most of us, that won’t be happen so quickly.
That’s why it’s important to pick a goal that you can achieve within the time frame of a year. Otherwise, you’ll probably get frustrated and give up.
Maybe a million dollars in a retirement savings account isn’t quite relevant to you yet. Instead, why not pick something that will help your situation in 2019?
For example, if you don’t yet have an emergency fund, starting to save up for one is a relevant goal. Or, maybe if you’re still in debt, getting rid of your high-interest credit card debt will be most relevant to you. Pick whatever will help you move forward in the New Year.
You also want to set a goal that you can achieve within a set time period — i.e., before the end of 2019. This requires you to know your financial situation very well, so that you can pick a goal that you can realistically achieve before 2020.
Automate Your Finances
Ask computer programmers what the biggest source of error is in their line of work, and they’ll tell you it’s people.
The same thing is true for your finances. Humans are the biggest source of error in money management. But, there’s also good news: You can remove a lot of human error by automating your finances.
Here are a few ways you can do it:
- Set up automatic savings
- Set up your bills on auto-pay
- Set reminders on your phone or email to pay other bills (like utility bills that may vary each month)
- Sign up for automatic budget updates through a service like Mint or Tiller
- Set low-balance notifications on your bank accounts so you don’t overdraw your account (or use a bank like Chime that doesn’t charge overdraft fees)
Find Accountability Buddies
It can be challenging to follow through with your money goals if you’re the only one holding you accountable. After all, it can be a little embarrassing to admit your money failures to close friends and family.
But that’s exactly why you need an accountability partner. If failure is embarrassing for you to admit, then you’re more likely to succeed. And if you do succeed, you’ll have someone there to help celebrate with you. This makes it even more likely you’ll stay the course.
It’s best to find an accountability partner who’s working on the same goal as you – this way you have someone who’s speaks your language. You can also consider hiring a money coach who can help guide you.
Picture What Success Looks Like
Our last tip is to picture what success looks like for you. This will help guide you through all the smaller decisions you’ll need to make throughout the upcoming year.
For example, let’s say you want a fully-funded emergency fund. But to do that, you need to stop impulse spending. So, every time you head to a store and put a tempting item in your cart, stop and take a second to think. Are you willing to take money away that can instead go into your emergency fund?
If you picture what success looks like — not having to worry about money all the time and less stress — you might be more likely to put that item back and stick to your savings goal.
You Can Achieve Your Money Goals…If You Set Them Right
Let’s be honest — no matter which money goal you set, this is going to be difficult. If it were easy, you’d have done it already.
But, we also know that you can reach your money goals in the upcoming year. It just takes a little bit of SMART goal setting, automating your finances, finding accountability partners, and visualizing success.
If you follow these four tips, you’ll be more likely to achieve your goals. You can do it.
This page is for informational purposes only. Chime does not provide financial, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal or accounting advice. You should consult your own financial, legal and accounting advisors before engaging in any transaction.