How to stick to your financial wellness resolution [read these 9 tips]

January is the time of year when many of us make New Year's resolutions to make our lives better. Because money and finances make a huge impact in our lives, you might resolve this year to increase your financial wellness or improve your financial situation in some way. Here are tips to help you stick to your New Year’s resolution.

Keep it simple

Choose one, simple goal. To keep this blog post simple, too, I’m going to focus specifically on paying down debt. My goal would be to “Reduce credit card debt.”

Choose realistic action steps

You won’t reach your goal without a plan; therefore, determine the best way for YOU to be successful. My action steps for paying down credit cards would be: 

• Create and stick to your budget. Put down on paper, in an app or on a spreadsheet all your monthly and ongoing expenses and net monthly income. Some expenses are fixed, but some are within our control. Set a limit for things you can control, such as dining out and entertainment.
• Reduce spending. Find areas in your budget you can cut. For example, if you have memberships you don’t use or need, cancel them.
• Stop using the cards. Stop using them, and if you need to, cut them up. If you need to save one credit card, be sure it’s the one with a very low or zero balance. 
• Pay at least $10 more than the minimum payment. This will help pay down cards faster AND save money on interest.
• Save for emergencies. Set aside what you can afford (while paying extra toward debts) in case you have an unexpected expense. A good goal is $25/pay period or $25/month. Just make sure it’s realistic for your financial situation.

Prioritize action steps

To be successful, it’s important to prioritize the steps you need to take. In my action steps above, my first priority would be to STOP USING THE CARDS. Next, I would create a realistic budget and determine where I can cut spending. If I don't stick to my budget AND reduce spending, I probably won’t be able to pay that extra money toward my cards. Next, when I spend money, I need to have a plan and pay with cash or money I’ve set aside. 

Be realistic 

It’s highly unlikely that I’m NEVER going to grab a pizza for dinner after a long day or get a chai tea latte when it’s freezing outside. Instead, I need to plan for these expenses in my budget while not going overboard. Being unrealistic in spending will just set yourself up for failure.

If you buy coffee from the coffee shop, reduce it to once a week, and make it at home the other days. Instead of getting pizza weekly, reduce it to once every other week, or buy a few frozen pizzas to have on hand.

Prepare for life’s little speed bumps

One of my favorite phrases is, "Life happens," and it’s true for most of us. At some point, everyone will deal with an injury or illness, a broken appliance, an emergency vet trip, a vehicle repair, or other unexpected expenses. If/when something like this comes up, do your best to get back on track after you’ve gotten over the speed bump.

Find cheaper alternatives

It's so much easier to replace an expensive habit with a less costly habit versus completely stopping. Instead of going to a weekly happy hour or dinner with friends, change your happy hour routine or make dining in fun. Cook together with your family and/or friends, or take turns buying the beverages and have them at home. You could make this a weekly event and even have a theme night, like Taco Tuesday or Waffle Wednesday. Figure out what you can do to still enjoy time together — but for much less money. 

Get support

I don’t have to shout from the rooftops that I am trying to pay down debt. However, I can certainly tell my close friends and family that I’m trying to save money and reduce my expenses. Your loved ones will definitely understand — and you never know, they might be relieved to hear it from you. They could be trying to do the same thing!

Celebrate the victories

Whether it's sticking to a budget, paying off a credit card, or avoiding charging purchases for a few months, you need to celebrate by treating yourself. Don’t ruin your progress by celebrating too big, but do SOMETHING for yourself when you pay off one of your credit cards or get $500 in savings. Go out for ice cream, or get that fancy coffee drink. 

Keep your eyes on your goal

With some planning, hard work and dedication, you CAN achieve your goal. If you have started taking action or haven't even picked a resolution yet, that's okay. You don’t have start on January 1 to make a positive change in your life; now is as good a time as any to start.

While you might need to make a few sacrifices, like sometimes skipping dinner out with your friends, it will be worth it in the end when you achieve your goal. You can do it!

If you would like support in creating a realistic budget or exploring options for paying down debt the fastest — like our Debt Management Plan — LSS Financial Counseling can help. Call 888.577.2227 to schedule a phone, virtual or in-person appointment; email us; or complete our short contact form.

Author Elaina Johannessen is a program director with LSS Financial Counseling.