4 Finance Hacks for 2020
50% of people will abandon their New Year’s Resolutions by the January 31. That’s insane! I personally find the idea of New Year’s Resolutions daunting but love the intention of them. Many people make finance related resolutions, but without the proper preparation and tools, these resolutions are often abandoned. So, I have put together 4 hacks that can help you keep your financial resolutions!
1) Start with a clear goal
1) Start With a Clear Goal
Lots of times, people will say that their resolution is to save money or spend less. And while these are great goals, they are super broad and can feel very overwhelming. Where are you supposed to start with those resolutions? And, when you feel overwhelmed, you are less likely to stick with it. So, when setting out to create your personal finance resolutions, take some extra time and make sure they are clear. I like to use the SMART method when creating goals (thanks FabFitFun for introducing me to this!).
SMART stands for
–Specific
–Measurable
–Achievable
–Relevant
–Time Bound
For example, I would use the SMART method when going about setting up a savings goal. Thinking about the method, instead of just a savings goal, I would create the following resolution (I have labeled it with the corresponding SMART point):
Save $5,000 (Specific and Measurable) towards a down payment for a house (Relevant) by the end of June 2020 (Time Bound) by transferring $200 from every paycheck into a specific savings account (Achievable and Specific).
2) Track Your Progress
Once you have a goal set, the next step is implementing it. And not only implementing it, but keeping up with it. This is an area that I struggle with, especially with finances. So, one crucial thing to do while make your resolution is to find a way to track your progress! There are so many apps and technology now available to help with tracking of spending and savings, so explore those options to find something that works for you. Automating the process will make it easier for you and thus you are more likely to keep up with it!
Going back to the savings resolution from before, one way to track/automate this would be to set up an automatic transfer on your paydays for the $200 to the specific savings account. Setting this up in advance will allow you to consistently work towards the goal while not stressing about remembering to do it. It’s an easy way to get to your savings goals!
3) Check In Often
Most people love a set it and forget it, but if you don’t check in its easy to forget about it. And that’s an easy way to lose motivation. So, make sure to set a time to go in and check in on your progress. I like to do these checks monthly, so as not to overwhelm myself but still keep myself motivated. Set a time every month and schedule it on your calendar with a reminder so you remember to do it!
For our example, a good way to check in on your progress would be checking the statement for that account at the end of the month. Seeing that amount grow month to month will feel super amazing and motivational!
4) Be Open to Making Adjustments
Life happens. Things change. This includes you and your goals. Over the year, you may change jobs, make a move, or have another life change that will require you to adjust. And that’s ok! It’s in fact, perfectly normal. So, as you go through the year, check in with yourself to make sure the goals you set at the beginning of the year still work for you. If they don’t, which is normal, then take some time to adjust or completely redo the goal to make sure it works with your life at that moment.
For example, with our savings goal above, if you get a raise, you may want to increase your contributions. Or, if you have a period of unemployment, taking some time off in order to use those funds for basic living expenses may the right move!
While setting financial New Year’s Resolutions can feel scary, by using the 4 hacks of being specific, tracking your progress, checking in, and being open to making adjustments will help you stick to your goals. I always feel so much more in control and overall more confident, so I love using these hacks throughout the year to keep me on track. I hope these help you so you can make 2020 your year!
Do you have a financial resolution? Let me know in the comments what it is (bonus points if you use the smart method).
