One of the most common new year’s resolutions is to make financial changes. Here are 4 goals that with some commitment are doable, impactful, and will help your conscious and subconscious mind work together to make change easier in your financial life.
1 – Start to review your spending every week.
If you want to change your spending habits you’ve got to commit to really understanding your current habits. This is one of those places where a little bit more focus can yield huge results. If you can really develop an understanding of your spending patterns, it will give you insights of what is working well in your financial life, and what needs improvement. Use a tool like Mint.com or PocketSmith.com to track your transactions and help you to categorize the results. (If you use Mint, under the Trends tab, the Spending by Category report is a personal favorite)
2 – Decide how much ‘fun money’ you and your partner have to spend each week.
If you’re like most of the couples I’ve worked with, there’s usually one area that you spend money on that drives your partner insane, and vice versa. You’re unique individuals with unique preferences so instead of trying to remake them, just decide how much you both get to spend each week without being accountable to the other and stick to that amount.
3 – Find yourself overspending? Spend cash.
If you find that you’re spending more on lunches, coffees, etc than you’d like in a given week, switching to cash can be a great scorecard. If you decide you’ve got to make it on $100 per week, and you get to the end of the week with money left over, that’s money you can direct towards your long-term goals. If you get to the end of the week and find yourself out of cash, you have a decision to make. You can always use one of your credit cards or hit the ATM but having that pause to think about what’s really important gives you the opportunity to make a new choice.
4 – Use images to help make better choices.
The goal-seeking parts of our brain seem to be driven by images which we can ultimately use to our benefit. Make a simple photo-book and start with 4-5 pages of goals you’ve accomplished to prime your goal-seeking mechanism. Then grab photos from Google Image Search or Pinterest to use in the rest of your photo book, images of the things you’d like to accomplish. You can then order an inexpensive book that can remind you of what you’re working towards that you can carry in your briefcase, keep where you process your bills, or use whenever things get tough and you need a dose of inspiration. My book has photos mostly of family travel that I’d like us to take, paying off our home, and goals for my company. Find images that are inspirational for you, and use them as a boost when choices get tough. (go to http://www.shutterfly.com/photo-books/simple-path and choose the 5×7 soft cover only option and you can do this quickly for less than $20)
What financial resolutions did you make this year and what do you do to stay on track?