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My 3-step game plan to conquer New Year’s money resolutions once and for all

PFI Newsletter Illustrations for New year's resolutions: champagne glasses clinking, surrounded by falling coins

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Here’s what: Setting up financial goals for the New Year isn’t impossible — if you do it the right way

I adore making New Year’s resolutions, but I’m also too much of a realist to ignore the fact that a lot of New Year’s resolutions — including some of mine — tend to fail.

Thankfully, through a few years of trial and error, I’ve unwittingly become somewhat of a seasoned expert at setting up New Year’s resolutions so that I accomplish my goals (instead of failing miserably). 

This year, I’ve come up with a three-step game plan to ensure I can make it through the unexpected hiccups and bumps that will no doubt occur, and accomplish my financial goals for 2022.  

1. I’m waiting until after New Year to define my financial goals

No, I’m not going to list my New Year’s resolutions as I participate in my family’s annual New Year’s Eve tradition of eating 12 grapes to bring in good luck and prosperity into the new year. I’m holding off two weeks to know what I want before I define my financial goals .

I want to take the time to think about what I want to do more of in my life next year — Travel? Save for retirement? Donate more? —  and make these ideas more definite and clear.

For each goal, I’ll estimate how much I need to save and a time frame to accomplish it. That way, it’s not just an abstract idea. It’s an actual resolution.

2. I’m reviewing past bank statements to make changes to my budget

To help accomplish these goals, I’m reviewing my bank statements for November, October, and September. I’m choosing to omit December because I know myself. As soon as I see my holiday spending in December, my heart will take a plunge, and I’ll delude myself into thinking I spend too much when really, I just enjoyed the holidays and gave generously.

While reviewing my bank statements, I’ll color coordinate any discretionary expenses using the following system: (pink — wasn’t worth it; yellow — can’t remember if I liked it or not; green — totally worth it). After going through my bank statements, I’ll either eliminate or cut down on any expenses marked pink or yellow. It will also allow me time to readjust my budget for the new year and get a bigger picture of where my money is going.

3. I’m going to check up on my financial goals and modify them accordingly

Sometimes things don’t go as planned. But just like when you get off at the wrong stop on a freeway, you reroute and keep going until you make it to your destination. 

I like setting up calendar reminders to help remind me of things. For my New Year’s financial resolutions, I’ve set up three calendar reminders throughout the year to briefly check up on my goals and see if anything needs to be adjusted.

If I didn’t save as much during one month, I can either extend the due date of my financial goal — if the deadline isn’t pressing — or adjust my budget for the following month.

Hopefully, in sharing this system, you’ll be inspired to create your own New Year’s resolutions (or at least, not make fun of those of us who do!).

Have a happy New Year.

— Sophia Acevedo, Personal Finance Insider reviews fellow

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Read the original article on Business Insider

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