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So, you’ve got the stockings hung, the tree decorated, the gifts wrapped, and some excited kiddos running around impatiently waiting for next week. The chaotic magic of Christmas is almost over!

Don’t worry, you’re almost able to finally sit back and relax… or are you? The new year is literally right around the corner — full steam ahead! — and so are those daunting New Year’s resolutions… watching… waiting…

What are your resolutions for 2021? Most people want to eat better, exercise more, travel more, or even just focus more on self-care. The list could go on and on for all of the types of resolutions you can come up with.

But, surprise, surprise, you’re on a finance blog! So, guess what kind of 2021 resolution we’re going to chat about today? 

If you answered, “I dunno. Probably finances,” then DING, DING, DING my friend: you’ve won yourself a brand new car and an all-expenses paid trip to, well, wherever our good pal COVID will allow.

Sorry. Didn’t think that through.

Anyways, so yes, finances. With all of the mess that 2020 brought with it, it’s probably safe to say we’re all hoping for a little more organization in the new year. What better way to feel more at peace in your personal life than to get your finances in order?

It’s not too late to do so, mama! And I have just the tips for you to start.

Check out how your budget stands, currently.

Look, before we jump into anything, we need to take a step back and take a good look at our budget. Really size it up. Stare it straight in the eyes. Make sure it knows you’re the sheriff around these parts!

This way, you’ll be able to see what needs work, like a home improvement project. You can see which screws need tightening, what could use a little paint, and which structures can be done away with altogether. 

So, what kind of home improvement can you do for your budget? Are there expenses that you can get rid of, like unused gym or tanning salon memberships? Are you expecting to add new expense categories in the new year? 

By looking at your budget under a magnifying glass, you’ll be able to see where you can make your improvements, whether that means cutting back where you can, or completely doing away with a few categories. 

Keep your resolutions, but make goals along the way!

Here’s the deal: resolutions are long-term, firm decisions to be kept throughout the year. Goals, however, make you feel like you’ve made progress as you achieve them.

Instead of just setting a resolution, why not make a broad “umbrella” resolution, and create little goals along the way! Like this:

Umbrella Resolution: Be healthier. (Vague, not specific enough.)

Goals for Resolution: Eat more veggie-based meals; exercise of your choice for 30 minutes to 1 hour, 2-3 times a week; slowly cut out sodas and drink more water and green tea instead; take the stairs instead of the elevator. (See how these are more detailed, progress-oriented, and achievable?)

In terms of finances, things could go something like this:

Umbrella Resolution: Get finances in order.

Goals for Resolution: Put a set amount of each paycheck into a savings account; focus on trying to pay off one credit card each month; find (or create) at least one more source of income; plan ahead and establish an emergency fund; and so on.

But if you really want to get into the nitty gritty of specific goals…

Ask yourself 4 questions:

  1. Why are you choosing this goal?
  2. What do you want to do to reach this goal?
  3. How are you going to get this goal accomplished?
  4. When do you want to achieve this goal?

Now, all you have to do is plug in your goal and its details so you have a clear vision for what you want to do to keep that resolution! Like this:

  1. I want to save for an emergency fund.
  2. I want to save up at least $500-$1,000 for an emergency fund.
  3. I’m going to cut back on unnecessary expenses (unused subscriptions, make lunch at home more often, get into DIY instead of buying new items) to help establish an emergency fund. 
  4. I want to have an emergency fund set up with at least $500-$1,000 by July 2021.

That’s all to say…

…sometimes — ah, who am I kidding, most of the time — it’s easy to say we want to do something, but never really know how to go about it, when to start, or what to do first. When you’re stuck in a rut like this, that’s when you have to flesh out your goals!

It’s a super simple process that could even allow you to find out more about yourself: your deepest desires; your true source of motivation; and how far you’re willing to go to reach a goal you’ve set. 

New Year’s resolutions are pretty intimidating. But they don’t have to be!

When you set multiple small goals along the way and throughout the year to stick with each resolution, you’re on your way to something more real, tangible, and achievable. 

And it sure does feel a heck of a lot better to feel proud of each little goal you set and reach, instead of being bummed your resolution only lasted 2 months!

What are your resolutions for 2021? What goals can you think of that’ll help you stick with those resolutions? 

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