A new financial year, just like a new calendar year is a great time to set new goals and make resolutions.
Money resolutions are a firm decision that you make to do, or not to do something. When a resolution is set, it requires determination, discipline and persistence to see it through.
For many people, setting a resolution is the easy part, but sticking to it can be quite difficult.
The trick to making resolutions stick is to get specific!
Many resolutions fail because they are just vague goals.
To make resolutions that you can achieve, you’ll need them to be specific and measurable. That way you know exactly what you are hoping to achieve and by when, and you can easily track and monitor your progress!
Here are 5 examples of resolutions that you could set to help get ahead this financial year:
Try replacing with: Save $100 per month in a separate savings account or in super.
“Save more money” is one of the most popular resolutions that people set but saving money for the sake of it can be hard to do. Clarify what you are saving your money for and identify a set amount that you want to save over the month or course of the year. Work out where you’ll put your savings and automate it to make sure it happens on a regular basis.
Try replacing with: Use a budget tracking tool to help stick to the budget
Making and sticking to a budget is key to achieving many financial goals but the resolution “stick to a budget” is vague. Instead you could resolve to find and use a budget tracking tool or create your own, and commit to using it to help you keep track of your spending. A budget tracking tool shows you where your money is actually going in real time. There are many online budgeting tools you can use. If you’re not sure which one is right for you ask us for a recommendation.
Try replacing with: Pay off extra $200 of debt each month, or $2,400 this year.
A resolution to pay off debt is good as it’s likely to save you interest, but you can get more specific with your resolutions than this. You could resolve to pay off a precise amount of debt per month, or a specific amount of debt over the course of the year, or you can resolve to use your tax refund to pay down your debt. Just be sure that your goal includes a dollar amount and an end date and make sure your repayments are realistic and affordable.
Try replacing with: Review my investment strategy
A resolution to “make more money” is likely to be harder than it sounds. Instead, you may want to think about what actionable steps you could take to make more money. Perhaps you could review your investment strategy or put a financial plan in place if you don’t already have one. In any case, focus your resolution on actionable steps that can lead to more money this financial year.
Try replacing with: Reduce my bills by $20 per week
If your resolution is to spend less money this financial year, a great place to start is to review your actual spending to find any areas where you’ve been overspending or paying for unnecessary expenses. From here you can then identify which specific areas in your budget you may be able to cut back or save. Make sure you give your resolution a time frame and an amount so you have both a goal and a basis for measuring your achievement towards your resolution.
You can make many different types of resolutions for your money. Whether it’s spending, saving, investing or giving. The trick is to start small and pick one change you wish to make. Challenge yourself to stick to it and motivate yourself with a reward if you do reach your goal and are able to maintain your resolve over the financial year. And of course if you need advice, please talk to us.