It’s resolution time again! Want to lose weight? Get healthier? Will this be the year you buy that new car? Declutter the house? Ditch the spouse? So many possibilities! We always start each fresh new year with such high hopes and expectations. And often high on the list is finally getting those finances in order, paying off debt if you have it, and getting started on that savings plan. Then the year rolls along, and what goes wrong? Well, generally the optimum word here is plan. Do you have one? This quote says It all: So whatever your financial goals are, you need to actually devise a strategy to achieve them. And you need to be as specific as possible. You first need to take stock of where you are. You can read about how to do that in my very first blog "New Year Savings Resolutions" When you are writing your goals (and yes, you should be writing them down) you should be as specific as possible. No vague “wishes” here, but very concrete plans for what you are saving for, how much you need to save and when you want it saved by. With this down in black and white you can now devise a plan of action to achieve your goal(s). Here is an acronym that you can use to help you with this: ."Specific: Exactly what are you saving for? (or what debt do you want to pay off? Measurable: Put a very specific dollar amount on your goal (i.e. I want to save $10,000 for a car by next fall). Achievable: Do not state goals that you cannot possibly reach. You will only frustrate yourself. But by the same token, you don’t want to make them so easy that you’re not really accomplishing anything (and still frittering most of your money away). Relevant: Is this an appropriate goal for you at this time, that you want to achieve? (Not saving for a house or a big wedding because everyone else is telling you it’s time.) (Not saving for a big boat when you have credit card or school loan debt to pay off.) Timely: Give your goal a deadline. "I want to save up a down payment for a house ($50,000) by spring of 2022." This way you can break it down as to how much you will need to save monthly to achieve this goal. Once you have a firm grasp of your goals and how much you will need to save each month to attain them, you can do what you need to do to get there. The first thing you should do is make the savings automatic. Set up an online bank account and have the amount you have decided upon deposited into that account each month, right off the top. Out of sight, out of mind. It’s amazing how you can learn to live on a reduced amount when you never see the money in the first place. If you need to pay off debts before you move on to savings, pay the minimums on all debts except one and throw as much as you can into the debt you are paying off. Once that one is paid off, move onto the next one. It will get easier and easier as you pay them off as you will have less minimums to pay as you knock off each one. The other bonus of having these very specific, measurable, and methodical goals is that it makes it easier to sacrifice where you need to as you see your money going towards a higher priority. It feels good to forgo a few immediate pleasures for the sake of your future goals when you can watch your steady progress towards your own financial bright future!
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