Understand Your Finances
4 key steps for making your financial resolutions come true
New Years is the perfect time to review your financial history—and get started on a new (and better!) path for the future. In this article, Chase Slate explores the best ways to set a goal, create plans to reach it, and give yourself the encouragement that you need to transform your hopes into realities.
For many of us, the start of a new year is synonymous with setting big, lofty goals. From losing weight to saving up for a down payment, going to the gym to squashing credit card debt, New Year's is when we take stock, make plans, and set our course for the future.
But, even with the best of intentions, many of our resolutions fall by the wayside before winter is over. Before long, we stop going to the gym, or packing lunch, or paying down our credit cards. Making our resolutions last through the year requires determination, regular check-ins and—most important—a plan. With that in mind, here are four steps to help you stay motivated and on the path to achieving your money hopes and dreams in 2019.
1. Take the work out of your financial goals
Whether you want to save more, eliminate debt or become more fiscally organized this year, automating your financial life is critical. For example, setting up auto payments to pay your monthly bills is a smart way to ensure you never miss a payment—and, in the process, never have to pay a late fee.
Automation can also help you toward your other financial goals by taking the pain and work out of saving money. For example, in 2018, I promised myself I'd contribute more to my retirement account. My original plan was to make small, automatic monthly contributions, but I never set it up. Instead, I waited until the end of the year to invest a lump sum. It's harder to part with a large dollar amount than with a lot of small ones, so my retirement contribution ended up being smaller than my original goal.
This year, it's all about automating!
2. Use social media to fuel your goals
When it comes to reaching your financial goals, social media can be a mixed bag. On the one hand, it can connect you to a wellspring of inspiration and support; on the other hand, it can also highlight the glamorous lives of your friends and family, fueling your own desire to spend.
According to the Chase Slate 2018 Credit Outlook, 77 percent of millennials made a purchase and posted it to Instagram in the past six months. Unfortunately, the perfect shot doesn't come cheap: on average, they paid more than $200.
But you can make social media work for you. Keep yourself accountable by announcing your financial goals to family, friends and on your social media feeds. Just like a workout buddy, a savings buddy can help you stay the course in 2019. You can also tap into forums and groups to share your objectives. To find inspirational accounts where you can share stories and advice, try using financial hashtags like #Financialfreedom, #SavingIt and #debtfreejourney to find encouraging stories.
3. Keep an eye on your credit
Good credit is critical for many big financial goals, like moving into a new home or buying a new car. A strong credit score can help you qualify for better loans, with lower interest rates—and can mean the difference between being able to afford the home or car of your dreams, and having to postpone your goals.
Check your credit score at the beginning of the year. If it is below 700, make it a priority to practice healthy credit habits like paying your bills on time and knocking down credit card balances. Avoid opening up too many cards at the same time, as well. Each credit card application requires a "hard" credit inquiry, and multiple credit inquiries can hurt your score.
By following good credit health, you can help improve your score—and get closer to reaching your dreams.
4. Move it...and lose it
Coming off the frenzy of holiday spending, many people start the year with a hefty load of credit card debt. If your debt is sitting on a card that's collecting interest, you may want to consider transferring the balance to a credit card with a good promotional rate, like 0 percent APR for the first 15 months.
Taking advantage of interest-free payments during the introductory period can help you quickly pay down debt, making your monthly payments more affordable and getting you closer to your goals.
Realizing your financial goals can be a long, difficult process, but putting a plan in place, regularly checking in on your progress, and surrounding yourself with a supportive community can help you move closer to the finish line. And, in the process, it can connect you with a community and lifestyle that can help sustain your efforts into 2019—and beyond.
Farnoosh Torabi is an award-winning journalist, author, television personality and personal finance expert who works with Chase Slate to provide financial education.