It’s no secret that many well-intended New Year’s resolutions fail after a few weeks of diligence. People often resolve to improve their finances at the start of the New Year and set lofty goals. However, it can be hard to stay inspired to stick with your changes when significant progress isn’t made. While not seeing an instant benefit as you tackle long-term goals is common, research shows that having an immediate reward can actually help to reach those goals.
If you’ve already broken your financial New Year’s resolution, you can get back on track. There’s still plenty of time to make financial improvements this year. Consider these three things you can do to see results NOW that will keep you on track to improving your long-term financial health:
Be financially aware.
Many people are out of touch with their financial health – they don’t know how much debt they have, the interest on it, or even how much they are contributing to their 401(k). Being aware of your overall financial picture is key to making improvements. Not knowing the details of your financial life can be costly so it’s essential to take the pulse of where things stand.
To be financially aware, you need to get organized. Gather all of your statements, bills and policies then separate different financial priorities into buckets like mortgage, insurance, utilities and investments. Create a budget and parse out needs versus wants. Seeing your finances organized on paper can help get things under control.
Create short-term goals.
Now that you have a snapshot of your financial health, create short-term goals you can work towards today. Rather than making your goal the seven-figure number you will need to save for retirement, make a small change that you can act on today such as bumping up a 401(k) contribution one percent. If debt is an issue, focus on one piece of the puzzle at a time to prevent yourself from feeling overwhelmed. For example, tackle the debt with the highest interest first (while making minimum payments on other accounts). Commit to taking a set dollar amount from each paycheck to use as an extra payment towards that debt. As you see yourself making progress you will hopefully be inspired to continue.
These smaller changes create real-time results. Tackling short-term goals to improve your finances can make reaching long-term financial goals more attainable. Remember that setbacks and missteps can occur along the way, but being financially aware and organized can help keep you moving toward improved financial health.
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