It’s the season of resolutions and goals; as you can surely tell. A new year, a new start- I know that I for one am always full of good intentions at the beginning of the year… the trick is sustaining them! Some people prefer to talk about goals, but to me a resolution is a goal and a goal is a resolution. They both embody the desire to change something in your life.
I asked for your financial resolutions for 2009 for a reason, not just so you’d have something to write in the comments to enter the contest. And you came up with some fantastic ones! Paying off a credit card (maybe your last one), saving money for a house, putting away $1000 a month, bulking up the emergency fund.
How will you transform your idea into reality? Here’s what works for me.
Step One. Make a concrete goal (or two). I want to save â‚¬1500 this year: â‚¬1000 in my emergency fund and â‚¬500 towards my retirement. I also pledged not to take on any new debt in 2009. Saying that you want to save money, or make more money, or live more frugally is not going to help- you have to be specific.
Step Two. Make the goal attainable. If my goal is too ambitious, I am only setting myself up for failure. This is why gyms are full of people at the beginning of January and back to their regular attendance by mid-March. â‚¬1500 in a year is equal to â‚¬125 per month, or, even better, â‚¬4.11 per day. I do believe that I will be able to meet this goal- that’s why I made the resolution.
Not taking on new debt in 2009 will be more difficult, as I’m only earning about half my previous salary (already not an extravagant amount) while I’m in school. We are really going to have to cut back on our spending, mostly in the eating out and extra spending areas of our budget. (I’ll be talking next week of how I plan to cut back spending and increase savings at the same time.)
Step Three. Make the goal exciting, and worthwhile. Are you really enthusiastic about saving money, or are you just resolving to do so because that’s what you’re supposed to say on January 1st? My resolution last year was to get my finances under control; I started this blog to help me along the way. Almost Frugal has helped me meet my resolution and I’ve learned so much along the way. I’ve kept my resolution because I was excited about the work I was doing and I felt it was a good use of my time.
Step Four. Make a plan. Take little steps. As I said above, â‚¬1500 is only â‚¬125 a month. I’ll be talking more next week about how I plan to put this money aside every month, but suffice it to say that I have a plan!
Step Five. Give reasons. Of course I would like to be able to spend money whenever I want, on whatever I want. I would like to update my work wardrobe. I want to go out to eat, and often. But I want to have financial security more than I want to do any of the above; the first step in reaching that larger goal is to build my emergency fund. I also feel that it is more important for me to build my emergency fund than to pay extra on my debt. This is both for the psychological comfort zone of having a basic emergency fund in place in case and the fact that most of my loans are on automatic repayment status and it is therefore difficult to pay extra.
You’ve talked about your financial resolutions for 2009, now share how you plan to meet them! What’s your plan?