The New Year brings a fresh start, and for many, that means setting new financial goals. Sticking to financial resolutions can feel challenging, but with the right approach, it’s possible to build lasting habits that can help you achieve your goals.
Set realistic goals
Setting achievable goals is the foundation of any good resolution. It’s tempting to aim high, but manageable, realistic goals can help keep you on track and motivated. Start with a specific goal that feels within reach. Instead of saying, “I want to save more money,” try something more tangible, like, “I’ll try to save $100 each month.” This clear target gives you something specific to work towards.
Tip: Use the SMART method: make your goals Specific, Measurable, Achievable, Relevant, and Time-bound.
Make a budget that works for you
Budgeting is one of the most powerful tools to help you stay on top of your finances. Think of your budget as a roadmap that guides your spending and helps you make informed decisions. Start by listing your monthly income and expenses. A typical family budget includes items like electricity bills, groceries, mortgage payments, clothes, and childcare costs. It’s okay if you need to adjust as you go—budgets are flexible.
Consider categories for essentials, savings, and things you enjoy, so your budget feels balancedand realistic. The key is finding a budget style that suits you, whether it’s the 50/30/20 rule (50% for needs, 30% for wants, 20% for savings) or another method that aligns with your lifestyle.
Tip: Try a budgeting app or a simple spreadsheet to track your expenses. Seeing where your money goes can be eye-opening and motivating.
Automate your savings
One of the easiest ways to stick to a savings goal, after you’ve accounted for all your monthly expenses, is to set it on autopilot. Many banks offer automatic transfer options that move a fixed amount from your checking account to your savings account each month. By automating your savings, you don’t have to think about setting money aside—it just happens.
Automating your savings can also prevent you from spending money impulsively. When your savings are transferred before you see the extra cash, it’s easier to adjust your spending around what’s left.
Tip: Start small. Even $25 or $50 a month adds up over time. Once you’re comfortable, you can increase the amount of savings.
Pay down debt strategically
If paying down debt is one of your resolutions, focus on creating a realistic plan. One strategy is the “snowball method,” which involves paying off your smallest debts first and working your way up. This method can help provide a psychological boost as you see smaller balances disappear. Another option is the “avalanche method,” where you pay off debts with the highest interest rates first, saving you money on interest in the long run.
Tip: Choose the strategy that feels right for you. The key is consistent progress and keeping the bigger goal in mind.
Track your progress regularly
When it comes to financial goals, small wins add up. Take time every month to review your progress. Are you on track to meet your savings or debt goals? Are there areas where you could adjust your spending? Can you contribute more to your Registered Education Savings Plan (RESP) or Registered Retirement Savings Plan (RRSP)? Tracking your progress can help keep you motivated and show you how far you’ve come.
Use this review time to celebrate wins, even if they’re small. Financial resolutions are marathons, not sprints. Recognizing your achievements along the way makes sticking to your resolutions more rewarding.
Tip: Keep a journal or make a simple note in your phone to track monthly goals. Reflecting on these little steps can help you spot trends.
Reward yourself along the way
Financial resolutions shouldn’t feel like deprivation. Include small rewards in your plan to help keep your spirits high and celebrate progress. Maybe every time you hit a milestone—like saving your first $500—you treat yourself to something you enjoy that’s affordable.
Giving yourself little rewards as you reach your goals helps make the journey enjoyable. Just remember to keep it within your budget.
Tip: Set up “mini goals” and rewards that won’t derail your progress. A small incentive can help keep you on track without compromising your budget.
Adjust as needed
Life changes, and sometimes, so do your financial goals. Re-evaluate your resolutions periodically to ensure they still align with your priorities. If your income changes, or if you encounter unexpected expenses, it’s okay to adjust your goals. Flexibility is a strength, not a setback.
By adjusting your goals as needed, you’ll be better equipped to handle whatever life throws your way while keeping your long-term vision in sight.
Tip: Revisit your goals every few months to make sure they’re still right for you.
Get support
Consider sharing your financial goals with a friend, partner, or even your advisor. Having someone to talk to about your progress, challenges, and wins can make the process feel less isolating. A friend or family member can help hold you accountable and offer support when you need it.
If your goals are more complex, your advisor can provide personalized advice to help you reach them. Advisors can also offer insights and strategies tailored to your unique financial situation.
Tip: A support system makes a difference. Find someone you trust who can encourage you to keep going.
Sticking to financial goals is never easy, but with a bit of commitment, you can start the year strong—and make real, lasting changes to your financial well-being.