With the new year approaching, you might be tempted to start making your list of resolutions for the upcoming year. If you are, you're not alone, as roughly 45 percent of Americans usually make New Year's resolutions, according to a University of Scranton study last year. Of those resolving to turn over a new leaf in various aspects of their lives, 34 percent make resolutions that are related to finances. This shows that money is a hot topic for continual improvement.
Start now, not January
Time plays a huge role in either aiding or hindering your financial resolutions. Instead of waiting until next month, start looking at your finances now to see what can or needs to be changed. Come to grips with anything that needs improvement, and take ownership of the situation. Taking action now is preferable to prolonging it for another day.
Be one of the 8 percent
The University of Scranton survey found that only 8 percent of people who set New Year's resolutions actually achieve them. This could be caused by a number of factors, but many struggle because they do not keep their resolutions simple or measurable. As opposed to creating a long list of things you want to accomplish, focus on a few items you can measure and keep yourself accountable to. You can take this a step further by seeking out assistance from others if you make your goals public by sharing on social media or telling your friends or family. Not only will this provide you support, but the American Psychological Association says sharing your goals improves your chances of successfully reaching them.
Set small saving goals
If you take a look at your current financial situation, does it make you want to throw in the towel on any efforts to improve it? Assuming that might be the case, this is the perfect time to get started on solving your money problems, as pushing it back until January is only going to make matters worse.
Look at your budget, and figure out two or three actionable steps you can take right now to cut down on your expenses. Do you have subscriptions you can cut or don't use? Are you a paid member of organizations that you have not participated in for months? If so, then those are easy ways to cut your expenses and apply them to other areas of your budget.
This is also a great time to look at any debt you may have. Allowing that debt to sit there another month will only make it bigger, so look for ways you can earn extra money and pair it with cutting expenses to start knocking down the debt now.
Do you have expenses and debt covered but not an emergency fund? Then this is the perfect time to start one. Most experts believe you need to have three to six months worth of your salary set aside in the case of an emergency. You might look at that number and cringe, but don't allow it to stop you. If you can only start with saving a small amount each month, then believe it or not, that small step will get you well on the path to reaching your overall saving goal.
Don't forget about your financial future
A complete picture of your finances includes a look into what you are doing for your financial future. The first question to answer is: Are you saving for retirement through a 401(k) plan at your job or through an outside retirement account? If not, then this is the time to start. Think of every day you delay as dollars that you are stealing from your future financial bank account. Or, if you prefer a positive analogy, consider the reality that time is your money's best friend; the more time you give your money to grow in interest-bearing accounts, the more money you make for yourself. Even if you start with something as small as $50 or $100 a month, it's better than doing nothing at all.
If you are investing for retirement, then this a great time to make sure that what you're invested in matches with your risk tolerance and is not being eaten away by fees. If you're apprehensive or uncertain about investing, then find ways to mitigate that through education. Many online brokerages and 401(k) plans offer free education to help you get started with investing. If you have access to such courses, take advantage of them. You'll be glad you did.
You still have time before the new year starts. Don't wait until then to look at what you can do with your finances. Be honest with yourself, set simple goals and you'll improve your chances for financial success.
John Schmoll is the founder of personal finance website FrugalRules.com, an online community centered on increasing financial literacy, budgeting, investing and finding freedom through frugality.