The resolutions of New Year’s Day were well-intended. We see New Year’s Day as a chance to renew ourselves, and it’s hard to find fault with that. But now we’re well into January – have you stuck to your guns?
Studies show that most resolutions barely last two weeks, leading many to dub January 17th as “Ditch New Year’s Resolution Day.” By now, it’s likely that you’ve snuck a few snacks or skipped the gym once or twice.
The trouble with resolutions is that they often aren’t concrete enough. Vague hopes of “becoming richer” or “getting out of debt” can easily slip away. It’s time we ditch resolutions and adopt plans instead. Personal trainers encourage fitness plans, like losing a specific amount of weight by a specific time. “Losing five pounds in one month” is much more attainable than “getting in good shape.”
The expert credit counsellors at Consolidated Credit encourage Canadians to take the same approach to financial resolutions, and we have put together the following five-point plan that will help you achieve a financially fit 2015:
- Real dollars and real dates. The holiday credit card bills are pouring in, and the balances might be downright scary. You may not be able to pay the entire balance right away, but you might be able to pay half by the end of next month. You won’t have that beach body this month but you might by June. Set a realistic figure with a real deadline and do everything you can to hit that target.
- Track your spending. Your personal trainer will want you to count your calories, and we want you to count your dollars. Use a budgeting app or old-fashioned pen and paper to get a snapshot of your spending and find out where your money is going so that you can identify your biggest spending sins.
- Cut by ten per cent. Even the most frugal Canadian could find a way to reduce their spending by ten per cent. Once you’ve totaled up your budget, look for ways to cut things down. If your food bill is $600 for a month, you can likely drop ten per cent and get to $540 with little effort by eating out less, clipping grocery coupons, and packing your own lunch.
- Go beyond the minimum. Tell a personal trainer that you want to build muscle faster, and they’ll add extra weight to your dumbbells. If you want to get rid of credit card debt quickly, you need to pay more than the minimum payment. Every little bit extra counts, and our credit card debt calculator can show you how.
- Get the most out of your repayment. Ineffective exercising will get you nowhere and you may even injure yourself. If you’re putting the time and effort into paying down your debt, make sure you’re doing it the right way. Zero in on paying down the credit card that has the highest interest rates, and you’ll save a lot of money over time. If the balance is too overwhelming, you could also try focusing on the card with the lowest balance, pay it off completely, and then roll your payments toward the next highest balance to gain momentum.
Following a simple, easy-to-follow plan will see you gain financial fitness over the course of 2015. Like physical fitness, patience is key. By the time you’re making your 2016 financial
resolutions plans, you might be breathing a whole lot easier.