As a year ends and a new one begins, it’s a good time to re-evaluate your finances and set some new resolutions. That’s what I’m doing, too, and I’m planning to achieve more of my goals in 2018.
Research suggests that spelling out financial goals for the New Year may not only be good for your wallet; it could also improve your overall well-being – even if you fall short of achieving all your New Year’s resolutions.
A December 2017 study by Lincoln Financial Group, for example, found that most respondents who set a New Year’s Resolution in 2017 – 83 percent – felt more positive about their finances at the end of 2017. And 69 percent who made a resolution but fell short of achieving it still said they “felt better” about their finances overall.
“Simply making a New Year’s resolution may lead to increased confidence in a consumer’s financial situation even if they don’t reach their goal,” Lincoln Financial said in a news release.
A Fidelity Investments survey about financial resolutions found that 53 percent of respondents reported less debt and 58 percent said their finances had significantly improved as 2017 drew to a close. Just 36 percent of respondents who didn’t make a resolution said the same.
With a financial plan, I feel more in control
Both studies’ findings ring true to me. I don’t always set financial resolutions, but when I do, I tend to feel a greater sense of control over my circumstances and, as a result, I often feel more optimistic.
Taking time to autopsy my finances and bad habits is often painful in the moment; but I typically feel calmer about my future once I’m done. It’s soothing to make plans and identify small, achievable steps I can take to further my goals.
When I bury my head in the sand and ignore my finances, by contrast, I often assume the worst when money gets tight and clam up out of fear.
That may be true for other goal-setters as well. When you have a financial plan, with clear-cut goals and tangible steps you can take to achieve them, you’re less likely to feel stuck or overwhelmed.
Top resolutions: Saving more, erasing card debt
According to recent findings by the credit reporting agency Experian, saving money remains the most popular New Year’s resolution.
The next most popular financial resolutions, according to Experian, include:
- Wiping out a credit card balance.
- Setting a budget.
- Paying credit card balances in full each month rather than revolving them.
- Sticking to the credit cards people already have rather than opening new ones.
- Paying credit card bills on time.
- Monitoring credit scores more regularly.
I resolve to be more financially organized
One of my biggest financial resolutions for 2018 is to get more financially organized. But instead of just saying I’m going to tidy up my finances and leaving it at that, I’ve broken down my goal into several micro-resolutions.
For example, I resolve to open my financial mail within a few days of receiving it and set it at a specific spot on my desk once I’m ready to file it.
Experts often tell people to break big goals into smaller steps so that their resolutions are more manageable.
I’ve also resolved to get back together with the financial budgeting system Quicken and regularly review my monthly spending. To make it happen, I’ve set a bi-weekly date with myself to open the financial program and look at what I’m buying.
Some resolution keepers attribute part of their success to creating goals that are “clear and specific,” according to Fidelity.
I’m unlikely to end 2018 as financially organized or as disciplined as I would like to be, but setting some achievable resolutions has helped me feel more confident.
I may not be able to control as much as I would like about what will happen in 2018. But I can control how I prepare for and respond to it financially.
See related: Resolution keepers: 5 who transformed their lives, Charged Up! podcast: Keeping financial resolutions