Four steps to a feasible financial New Year’s resolution
According to a survey conducted by LA Fitness, the second most common New Year’s resolution for 2013 is “save more money.” It is clear that people have placed getting their finances in order high up on the to-do list for the year. Following are four steps to help individuals set a financial goal they won’t discard by February.
1. Get organized first. In order to set an attainable financial goal, consumers must first organize their financial documents, including bank statements, tax returns, and loan agreements. Keep these documents – especially tax records – in a safe place.
2. Assess your financial situation. Once all financial documents are in order, consumers will be better able to see a clear picture of their current financial situation. When assessing their finances, consumers should be especially conscious of their income-to-debt ratio. This knowledge is key to setting realistic savings goals.
3. Examine spending habits. Consumers who track their spending habits for a month prior to attempting any changes are better able to identify areas where they can cut back without making a drastic lifestyle change. Avoiding unnecessary budget restructuring makes any financial resolution easier to keep.
4. Be specific when setting goals. Consumers’ financial resolutions should be both specific and realistic. Rather than resolving to “save money,” create an automatic paycheck deduction of $25 each month into a savings account, for example. Consumers should also use the information gathered in the previous steps to create a goal that will fit within their current lifestyle with minimal changes.
For consumers who are committed to improving their finances in 2013, the four steps above will help in setting a goal that will last.
Rose Oswald Poels is the president and CEO of the Wisconsin Bankers Association.
Sign up for the free IB Update – your weekly resource for local business news, analysis, voices, and the names you need to know. Click here. If you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.