New Years is a classic time of year to think ahead towards the new year. Typically it is a time where one would make resolutions for change in the new year. Most of the time it is things like start a new diet, go to the gym more often, or call your mother every Sunday. And most of the time, these things don't work out.
When it comes to your finances, a new year is a good chance to put into practice some smart money changes as well – however, they should be smart goals that you can keep throughout the year.
Small, Simple Goals
Most New Year's resolutions fail because they're too drastic. You can't go from eating Cheetos and watching daytime TV to running a triathlon without amazing miraculous and drastic change, and you won't be able to go from spending all your money and living off your credit card to a giant emergency fund and a retirement plan without some seriously hard work – so don't make your goals high and lofty.
Aim small and ensure that you hit it. If you meet your goal by the end of January – great. Make a new one then, but don't set a goal that would require perfection throughout 12 months, as the slightest mistake will set you back and keep you from achieving your goal.
Start small to begin the growth process – eventually it will turn into more. Do a goal like saving $50 a month for the rest of the year. You can call it next year's Christmas Fund or whatever you want, but it is a small amount that should be easy to set up to automatically come out of your account every month. Do that once this week and next January you'll have accomplished it without having to do anything else other than maintain a balance in your bank account.
Home, Work, Finances
Alongside setting simple goals I don't think you should make too many different goals. Having a goal for your career and one for your personal life is fine, but having an individual goal for each month of the year for each of your individual stocks is a bit extreme. For myself, I'm setting three goals for the new year.
First, for our home. As we just purchased our home, there is a fair bit of work that is yet to be done in order to get it to the place that we would feel most comfortable. We have some work to do on our deck and our kitchen, for example, so I'm setting some goals to get those projects completed in 2014.
Second, I'm also setting a goal for myself to get a raise at my current employment. I've made it into a position where I very much enjoy my work, so I'm hoping to continue doing it throughout the year at a level that exceeds the current standard so that during my annual performance review I can make a case to have a decent raise.
Finally, for our finances I'm hoping to recover a bit from purchasing a home (who knew they were so expensive?!) as well as continue to make progress towards our savings goals.
What financial resolutions are you making this New Year?