5 Easy Ways to Get Your Financial Resolutions Back on Track
The new year is the perfect time to make financial resolutions, but that doesn’t mean they’re easy to keep. In fact, some 62% of us have given up on those resolutions by February, whether we’re just too busy to fit them into our daily lives or because we bit off more than we could chew.
If you’re struggling to stay on top of your own financial resolutions, the easiest way to get them back on track is to simplify them. Remember, the best way to make a big difference in your finances over time is to make a small difference in your habits today.
By making your resolutions easier to keep, you’ll have a better chance of fitting those new habits into your lifestyle and sticking with them. From simplifying your budget to attacking your debt, here are 5 easy ways to make those financial resolutions a permanent habit.
5 Easy Ways to Rally Your Financial Resolutions
1. Simplify your budget
If you decided to kick-start your budget in 2021 by watching every dime, you’re probably feeling the time crunch of that resolve. It doesn’t matter whether you’re using paper, electronic spreadsheets, or mobile apps, tracking your budget that intensely is just too time-consuming.
It’s also unrealistic.
Life changes. Things happen. You can’t account for every bump that might appear along the road, so trying to follow a strict budget down to the penny is likely to leave you feeling frustrated and unsuccessful.
Instead, try moving away from the idea of a budget that restricts every area of your spending, and move instead toward a more general spending plan.
How to simplify it:
Start by adding up all your expenses and subtracting them from your income to see how much money you have left to spend every month. For expenses like groceries that aren’t set in stone, look at your spending over the last few months and consider estimating on the high side just to be safe.
Once you know how much extra money you really have available, you won’t need to track all those expenses separately. Just keep track of your unplanned spending together, from your Amazon shopping to your takeout, to make sure you’re not going overboard.
Using a broad spending plan instead of a strict budget gives you more breathing room, letting you pick and choose where to spend your money—more Amazon spending just means less takeout, and vice versa. It also gives you room to handle unexpected expenses, so you can make that minor repair or adopt that adorable puppy without “cheating” on your budget.
Because a spending plan lets you shift your spending around to make room for the things that make you happy, you’ll be far more likely to stick with it.
How to do it in the Simplifi app:
You don’t have to do anything special to do this in Simplifi. Just check your monthly spending plan and adjust it however you’d like. When you connect your accounts to Simplifi, the app gathers your information, organizes it for you, identifies your income and recurring bills, and sets up your spending plan automatically.
If you want to add expenses that aren’t set amounts, like groceries, use the planned spending feature to estimate what you’ll need and Simplifi will set that money aside for you.
2. Simplify your spending decisions
Simplifying your budget makes it easier to watch your spending, but that doesn’t mean you’ll always know where to cut back when you want to. Are there places where you could trim a little to save a lot? How can you cut back where it matters without feeling guilty over every dime you spend?
Watching your spending is one of the hardest things to do when it comes to managing your money—which makes it one of the first places people tend to give up when they’re trying to take control of their finances.
Why? Because there are just too many moving pieces to watch. Fortunately, there’s a better way.
How to simplify it:
If you’re having trouble figuring out where you can save money, simplify the problem by focusing on a few areas at a time. Maybe you want to stay on top of that Amazon shopping, or maybe you’re wondering if you’ve been ordering that takeout a bit too often.
Set a target spending limit for yourself in one or two areas that you want to watch more closely and start with those. Focusing narrowly on small changes is one of the main keys to developing new habits because it’s so much easier than trying to tackle everything at once.
How to do it in the Simplifi app:
Create a watchlist, with or without a specific limit, for any spending you want to keep a closer eye on. Simplifi will automatically track your spending and even alert you when you’re getting close to your limit if you decide to set one.
3. Simplify your savings plan
When it comes to savings, one of the main reasons people give up on their financial resolutions is because they’re not seeing a big enough difference to stay motivated.
But small changes can make a huge difference in the long run. If you haven’t been saving anything before, starting to save even a small amount every month can really make a difference down the road. Or, if you’ve resolved to save a little more than you were before, that’s great, too!
Still, when you feel like you’re not making much headway toward your goals, it’s hard to keep trying. The negative cycle of disappointment can be too much to overcome.
So how do you stay motivated long enough to get where you really want to be?
How to simplify it:
To stay motivated, focus on tracking each individual contribution instead of only looking at your final goal.
Create a calendar where you can check off that contribution every month. Even better, break that monthly contribution up if you need to, making smaller contributions and checking them off more often. The key to any new habit is repetition.
Being able to celebrate putting even $1 or $2 into your savings every day can feel more motivating than a single monthly contribution, helping you build a habit that will last.
How to do it in the Simplifi app:
Set up as many savings goals as you want to. Simplifi will set aside the money you need every month for each one and celebrate your contributions, even sending you reminders if you want them.
4. Simplify the way you pay down your debt
Deciding to pay down your debt is a lot easier than making it happen. Something as large as a college loan can feel daunting to anyone.
This is another place where it’s easy to give up because you feel like you’re not making a difference, especially if you’re facing several different kinds of debt at once, like a school loan, a car loan, and credit card debt.
Don’t give up! One of the main pillars of a healthy financial life is keeping your debt low. You just have to find a way to attack it that works for you.
How to simplify it:
Start by listing each debt you have along with the interest rate you’re paying on that balance. Higher interest rates cost you more money, so if you have $100 you can put toward an extra debt payment, it’s best to use that money on the loan with the highest interest rate.
Why? Because it will make the biggest difference in cutting the amount of interest you owe next month, which frees up more money to keep paying down that debt.
Paying down debt is an extremely positive cycle. The more debt you pay, the more money you save in interest each month. So even if you start by chipping away at it one small amount at a time, it’s worth doing.
To stay motivated, try the same calendar trick you used for your savings. Make your monthly payments as usual; then, on top of that, make a small weekly or even daily payment on the loan you’re paying the most interest on—and check it off on the calendar every time you do it.
Don’t worry about how far you’re getting. Just focus on checking that regular contribution off on your calendar. It can also help to tie the payment to something else you already do regularly, like drinking a cup of coffee every morning or reading the news every weekend. Make that extra debt payment a part of that routine.
How to do it in the Simplifi app:
Just connect your loan and credit card accounts to Simplifi. The app will automatically organize it all in one place so you don’t have to hunt those balances down one at a time. As you pay down your debt, Simplifi updates your balances so you can see your progress.
If you want to make sure you set aside enough money to meet your debt reduction goals every month, you can include them in your spending plan by adding a monthly planned spending amount or by setting up a special savings goal for the year. Either way, Simplifi will track it for you and make sure you don’t spend that money by accident.
5. Simplify your approach to money management
When we try to create a new habit and start feeling overwhelmed, it’s easy to make things worse with the kind of negative thinking that comes from frustration: “This is too complicated. I don’t have the time. It won’t make a difference anyway.”
But it will make a difference if you stick with it. And there’s always a way to make things easier—whether that means making it less complicated, less time consuming, more effective, or all three.
How to simplify it:
Start with your mindset. Instead of just saying, “This is too complicated,” follow that thought with this one: “How can I make it simpler?” If you feel like what you’re doing is too time consuming, ask yourself how you can make it quicker.
In short, ask yourself how you can simplify it.
By simplifying each task, you’ll make it feel more manageable, finding a way to fit it into your regular routine.
How to do it in the Simplifi app:
That’s exactly what Simplifi was designed to do—make tracking your finances easier by taking the time-sucking calculations and manual work out of it so you can stay on top of your money in just a few quick minutes a day! Learn more here.
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