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GUEST COLUMN – Your financial resolution

Financial goals are one of the most popular New Year’s resolutions people like to make.

Whether it’s paying down debt, spending less or saving for a special item, many people resolve to do better with their money in January. Unfortunately, we all know how long many New Year’s resolutions last, but I am going to give you some tips on how to start your path to money peace for good.

Get everything on paper – Start by documenting everything that goes out of your bank account and what is spent on your credit cards each month. Before you can come to grips with your money and have a real plan in place, you have to know where it’s going.

This also includes fixed expenses, bills and all those lattes. Make sure you have a line for coffees, lunches out and snacks.

What does your debt look like – This can be a tough one for some people, but in order to pay your debt off you have to come face to face with the amount.

Write down all your outstanding balances and interest rate for each credit card. Next step – unless you are paying off your credit card balances monthly (which you should be), take them out of your wallet right now and stop using them.

Are there small balances that you can pay off right away? It’s always nice to get these ones out of the way, otherwise it makes sense to pay the credit card with the highest interest rate off first.

Make your plan – What is the total amount of money – after taxes – coming into the household? If it doesn’t cover all your expenses, including debt pay-down you will need to make adjustments. It’s easy to drop the grocery bill by a couple hundred dollars per month by meal planning and looking for sales.

Are you eating out way too much? This is another area you can trim to make your money last.

Advanced money planning – Figure out expenses that come out infrequently throughout the year – taxes, ski passes, clothing, gifts etc. Determine how much per year these surprise items cost – these are the ones you usually charge on your credit card. Now divide by 12 and start saving a monthly amount in a savings account for these expenses.

Make your resolutions – Once you have everything on paper, make a couple small resolutions that you can stick too around your finances.

Are you like many people and avoid opening bills when they arrive? Make a resolution that this year you will open every bill when it arrives in the mail.

Are you drowning in debt? Make a resolution to stop using your credit cards and start paying off the balances. Small bite-size resolutions are more likely to stick than unattainable enormous goals.

Most importantly, don’t beat yourself up about your financial situation. Once you get it all on paper you can start to take control and make steps toward attaining money peace.

Kathi Bridge is a money coach and educator, helping professionals with active families who want to stop running out of money at the end of the month.

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