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December 04, 2020

How to set a New Year's financial resolution

Finances New Year

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The unpredictable nature of the past year has taught us that you can never be too prepared, especially when it comes to your money – and what better time to set a financial goal than the fresh start of a new calendar year?

When it comes to achieving a financial goal, whether it’s growing your savingsmanaging debt, or starting a rainy day fund, there’s no quick fix. It takes time and diligence, which can make it more difficult to stick to. That’s why it’s important that any resolution you make is actionable, tangible, and trackable so you can set yourself up for success in the New Year.

Below, we’ve listed four tips to help you get started with setting your financial resolution.

#1: Put pen to paper.

Once you have your resolution in mind, be sure to write it down in a notebook or on a sticky note. Keep it somewhere visible to you, like next to your computer monitor, on your refrigerator, or taped to your bathroom mirror, so it’s always top of mind. The act of writing your goal down – financial or otherwise – makes it more tangible, and seeing the words every day can encourage you to keep working towards it if you feel like you’re losing steam.

#2: Set short-term goals.

A long-term goal can be daunting, which is why it’s important to set short-term goals and focus on the simple things you can do to reach them. For example, if your goal is to save $1,000 by year end, don’t focus on the final number. Instead, determine what it will take each month ($80), week ($20) and day ($2.75) to reach it, and start there. You can also approach the goal by paycheck. If you get paid bi-weekly, know how much money you have to put aside every other week to stay on track. You can start building your savings with PFCU with our Regular and Higher Yield Savings Accounts.

Consider planning small rewards, like a latte from your favorite coffee shop, for when you reach each short-term goal. Not only do you deserve it for your hard work, but small rewards can help you stay motivated all year long.

#3: Track your progress.

A major reason most New Year’s resolutions fail by February is that people don’t track their progress. Keep a written or digital money diary to keep note of the headway you’re making towards your goals at regular intervals. For some people, a spreadsheet that lists each date you need to make payment on your debt or to a savings account works best. For others, digital or physical calendar reminders to transfer funds to your savings account, for example, are preferable. Figure out what works best for you, and stick to it! When all is said and done, you’ll have a physical record that shows how much you were able to accomplish. You can even reference this log when it’s time to up the ante for your next set of resolutions in 2022!

#4: Check in with yourself.

Another reason we neglect our resolutions is because we get discouraged or overwhelmed if the goal becomes too unrealistic. Sometimes this causes us to quit altogether. Be sure to have regular check-ins with yourself to gauge whether or not your goals are sustainable – and if they’re not, think of ways you can adjust them so that they are. To reference the previous example, if saving $20 a week is stretching you too thin, don’t stop saving altogether, but adjust your goal to $10 or $15 a week for a few weeks. You’ll still be tracking towards your goal in the end, but will have more wiggle room in your budget. Remember – life changes day by day; your goals might, too!

Setting financial goals can seem like an overwhelming task, but ultimately you are the one that benefits when you accomplish them. Start small, don’t be too hard on yourself, and think of how fulfilling it’ll be at the end of 2021 when you can look back at all you’ve accomplished.