Why Money and New Year’s Resolutions Don’t Always Mix

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Clock-331174_640Most New Year’s Resolutions fail by the time February and March approach, if not sooner. If you were to ask all of your friends about their New Year's Resolutions, you would probably find that three seem to occur more often than anything else. You may have already guessed what they are, but in case you are wondering, they are most likely centered around losing weight, getting fit, and saving money.

Just like the weight loss and the fitness, people start out in January with the real desire to change their spending habits and to try to put away a set amount of money each month. However, as we also know, for many people, January, February and even March can be months spent trying to pay down holiday purchases on credit cards.

The reasons that New Year's Resolutions often fail when it comes to savings can be broken down for several simple reasons. By recognizing where you are struggling, you can plan to compensate for this and find yourself with money in the bank.

  • Bill backlog – With all the credit card bills from the holidays, savings can be "temporarily" put on hold. Unfortunately, this often sets a pattern of simply putting savings off to next month or buying again once credit card balances drop.
  • No budget plan – One of the most difficult things about savings is if you aren't conscious of where you are spending your money. By having a budget and tracking your spending, you will be more effective in sticking to it.
  • Using debit – People spend more when they use debit cards than if they pay cash. If you aren't comfortable carrying cash, limit the funds in the account linked to your debit card to your monthly or weekly allotment to prevent overspending.
  • Save first – Before buying that extra venti latte in the morning, put your savings for the day, week or month, in your bank account. Avoid linking this account to your debit or credit account.
  • Be reasonable – If you can only save a hundred dollars a month, don't set yourself up for failure by trying to save five hundred. Be reasonable with savings and, with success, increase your goals.

Finally, it is important to have accountability. Keep a record of what you are depositing into the savings account and continue to stick to your savings plan. Avoid temptations to dip into the account except in the case of some type of true emergency situation.