If you’re like me, you’ve already made a few New Year’s resolutions that will inevitably fail. And while it might be okay to abandon that trip to Paris or give up on trying to run a marathon, if you lose track of your financial resolutions you could wind up in short-term and long-term crisis. These seven financial resolutions will not only make money management easier, but they could actually change your life.
1. I Will Talk With My Spouse About Our Money
One of the biggest money mistakes couples make is not talking about money, or talking about it and only arguing. Talking about money does not have to mean fighting about it.. Talk about your goals, dreams, budget, spending, debt and your long-term plans. It’s not fair for the financial responsibility to rest on just one set of shoulders; share the load and work together.
2. I Will Make A Monthly Budget
Whether or not you’ve tried budgeting in the past, this can be your year to make it stick. Budgeting can be as simple as sitting down with a pen and paper. Before the month begins, plan out how much you’ll earn, how much you’ll spend in each budget category, and how much is left over for other financial goals. Need help getting started? Download this Quickie Budget Form.
3. I Will Live On Less Than I Make
This won’t happen by accident and will likely require some sacrifice. In order to live on less than you make, you either have to increase your income or decrease your expenses. Whether you make $20,000 or $200,000, if you don’t live on less than you make, you’ll always be broke!
4. I Will Save An Emergency Fund
There are those special people who never get sick, never lose a job, and never have a leaky roof. For everyone else, there’s the Emergency Fund! You will have financial surprises and emergencies; there’s no way around it. With an emergency fund in place, these potential disasters become a mere inconvenience. If you’re not yet debt free, you should start by saving $1,000 as a starter emergency fund. Once you are debt free (besides your home mortgage), you should save an additional 3-6 months’ worth of living expenses as a full emergency fund.
5. I Will Become Debt Free
2012 is your year to finally become debt free! In our early twenties, Katy and I were over $50,000 in debt, stressed to the max, constantly fighting about money and feeling downright hopeless. It took us 16 months, but we climbed out of that dark hole and it’s changed our lives forever. No more putting it off! Start taking action now Check out the 11 Key Actions That Helped Us Become Debt Free!
6. I Will Get Life Insurance and Institute a Will
The most selfless gift you can give your loved ones is to make sure they’re taken care of when you’re gone. This year, this month – today! – call a good insurance agent and institute a 20 year term life insurance policy worth 10 times your annual income. Your next step is to write and record your will through either an attorney or one of several reputable online services. There is NO excuse for ignoring these!
7. I Will Be Accountable For My Goals and Behaviors
What’s the difference between a dream and a goal? A solid written plan and the accountability to make it happen. You can read books, attend seminars and dream about financial freedom all day long, but if you aren’t going to hold yourself accountable for your failures as well as your successes, you’ll find yourself lagging. The reason our financial coaching is so successful is the massive level of accountability we provide. If you want to lose weight and get in shape, you hire a personal trainer. They will be there to push you, guide you and hold your feet to the fire. It takes the same thing to get in shape financially.
What financial resolutions do you have for 2012? How do you plan on making sure you keep them? Talk about it in our comments section below.
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Clint and Katy Davis are PerkStreet Customer Columnists and founders of Davis Coaching. As financial coaches, their passion is helping people become and stay debt free! Their personalized coaching is designed to help you get your financial life where you want it to be. Like personal trainers for your finances, they can help you develop a specific plan to achieve your goals, and provide the expertise and accountability to get you there. If you’re ready to take control of your financial life, visit Davis Coaching online, check out the Davis Coaching blog, and connect with Clint and Katy on Twitter and Facebook.