Don’t be part of the 43%.

New Year resolutions are a funny thing – some people always make them, and others do not. Of the people that normally make financial resolutions, 43% fail by the end of the first quarter. A study by Chime Financial showed that by the end of the year, only 8% of those who made financial resolutions stuck to them. I have four resolutions that should be pretty easy to keep.
1. Pay yourself first. Review your payroll deduction retirement plan and increase your contributions. You may think you can’t afford to increase your savings, but it is either pay Federal Income Tax, or pay yourself.
2. Spend below your means. When spending, ask yourself if the item is a need or a want. If it is a want, ask yourself how you will feel having spent that money on that item one month from now. I have no problems with setting a certain amount for discretionary spending each month. It is the spending beyond that amount that gets people into trouble.
3. Pay down your debt. If you have consumer debt beyond your mortgage or car payment, get rid of it as fast as possible. Always pay more than the minimum due and don’t rack up more consumer debt – pay cash instead.
4. Build up your cash reserves. Look at trying to always have 6 months of income in a liquid account. With strong cash reserves, you will not have to use credit when an emergency arises.
Anytime you want to make a major change, the resolution is simply a way to make explicit your intent. The real key is to make this resolution into a habit.


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