If you made a financial New Year’s resolution for 2017 but things aren’t going as well as you’d hoped, here are tools and advice that’ll renew your determination and help you achieve your financial goals.
1. First things first, mind over matter
The biggest roadblock to reaching any goal is your mindset. Without the right attitude, no tools, tips or tricks — which I’ll share in a minute — will help. The best way to ensure you’re in the right headspace is to remember why you set the goal — whether it’s to pay down debt, save more or repair your credit — in the first place. Remind yourself by asking, “Why am I doing this?” And answer emotionally. Chances are you want greater financial freedom, the ability to take a dream vacation, or maybe you want to own a home and less debt will help you qualify for a mortgage. Remember: The stronger your reason, the more motivated you’ll be.
OK, now on to the fun part. Tips and tools!
2. If you can’t stick to your budget, check it for errors.
Did you resolve to make a budget this year, and then do so only to discover it’s impossible to stick to? If this is the case, it’s possible you’ve budgeted incorrectly. To be fair, making a budget is hard. The process is complex, time intensive and can be mentally and emotionally draining, especially for first-time budgeters or self-described “non-numbers” people. Therefore it’s easy to make mistakes or cut corners, and while we wholeheartedly appreciate the struggle, settling for a bad budget won’t help you achieve your financial goals.
So, double-check your numbers against those of a trustworthy budgeting tool. PearBudget is a simple, easy-to-use web platform that walks you through the creation of a budget and helps you manage it. Note that after a 30-day trial, the platform costs $4.95 a month. However, PearBudget began as a popular, easy-to-use Excel spreadsheet that’s still available for free, so if you feel comfortable taking the reins completely after one month, you can continue with PearBudget’s model for free.
However, if you’d rather budget completely offline, download one of Microsoft Office’s budget spreadsheets for Excel.
3. Not saving enough? Track your spending habits.
If you resolved to save money, but your savings account balance isn’t growing on par with your expectations, there’s a chance you incorrectly analyzed — or simply made assumptions about — your spending habits. The best remedy for this is to review your spending habits with a fine-tooth comb. And thanks to modern technology, you don’t need to do a manual audit. All you need is an app.
Intuit’s Mint, is a free app that syncs to your checking account and analyzes your purchases. Give the app permission to sync to your credit union account (doing so is safe and confidential), and Mint will provide you with on-the-go updates and weekly spending analyses.
Mint automatically detects and assigns the appropriate category for each transaction, but you can manually reassign the transaction if necessary. My favorite thing about Mint is that you can assign multiple categories to one transaction. This is helpful when shopping for several expense categories at once. For instance, say you spend $100 at Target. $50 of it was on groceries, $20 on clothing, $20 on cleaning supplies and $10 on entertainment—you can assign those dollar amounts to each category. This functionality allows you to get a super specific profile of your spending habits, which not only makes budgeting easier, but also allows you to accurately identify and remedy spending habits that are preventing you from reaching your savings goals.
4. Minimize temptation.
Once you’ve identified the spending habits that hamper your savings goals, the next step is to find ways to avoid situations in which those habits are triggered. For example, if online shopping is your vice, delete your favorite online stores from your bookmarks bar. If lattes are your draining your checking account, reroute your commute to avoid driving past your favorite coffee shop—whatever your trigger, identify it and find ways around it.
5. Credit rehab going slower than planned? Get a credit-builder loan.
As the name suggests, a credit-builder loan has one purpose: to help you improve your credit profile. It works like this: You apply for a small loan, often called a secured loan, whether you have bad credit or no credit, and you are approved, but there are strings attached—strings that protect the lender. The money you borrow is deposited in a savings account that you cannot access until you have fully repaid the loan. If you need a nudge to apply for a credit-builder loan, consider this: a 2013 study showed an average improvement of 35 points with six months of on-time payments for loans as small as $100.
6. Reward yourself for small gains.
The path to better credit is often long (or longer than you’d like), so to stay on track make (inexpensive) celebratory pit stops along the way. For example, if you’re rebuilding your credit, every time your score increases 5-10 points, treat yourself to an ice cream cone or an evening relaxing in front of TV. For more ideas like this, read the Muse’s Go Ahead, Reward Yourself (Without Blowing Your Budget).
7. Ultimately, don’t give up.
Hang in there. Nobody said making a big financial change would be easy, and you knew when you set your goal that there would be times when you’d be uncomfortable. So settle in and stay strong. Remember: it will all be worth it in the end.
Still need help?
You can’t always reach your financial goals alone. Speak with one of State Employees Credit Union’s expert financial planners for guidance. With a full range of products, services, and resources for people of all ages and lifestyles, our Personal Service Representatives can help you set and achieve short and long-term financial goals. Call us today 800-983-7328.