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If you're seeing New Year's resolutions through a monetary lens this year, make sure you're setting the right goals for yourself. There are certain financially inspired resolutions that you'd be better off avoiding, especially if you want to actually accomplish your goals. Here are six financial resolutions to avoid.
There aren't many "cold turkey" methods that work out well. Quitting anything abruptly and completely can be overwhelming. Say you're someone who spends a lot of money on takeout, and you resolve to quit doing that entirely. Even if you succeed, you might feel deflated, and if you eventually fail, your sense of defeat might be heightened.
Instead: Start by scaling back your spending and work toward a larger goal. Along the way, celebrate every small victory to keep the momentum.
The world of TikTok is like keeping up with the Joneses. Videos are spun and edited in ways that make viewers feel inspired to try out new recipes, challenges, products, and so on. But just because a money-saving trend like the insane envelope challenge looks enticing doesn't mean you should give it a whirl yourself. You might find yourself treading in waters you aren't equipped to keep your head above.
Instead: Break apart the practicality of any money-saving trend you're intrigued by on TikTok and ask yourself how practical and attainable it is. If the answers smacking you in the face are of the "no" and "absolutely not" sort, put your phone down and move on with your life.
Investments are a fickle beast, and you're better off leaving them out of New Year's resolutions unless you have experience with the ones you're gravitating toward. Otherwise, you might find yourself in a financial world you don't even understand, which is never a good place to be.
Instead: Connect with a financial advisor to get professional advice before making any risky investments you might regret later. And, of course, do your research!
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If you only have one $5,000 credit card to pay off and your resolution for the new year is to pay off all debt by the year's end, we're not worried about you. But if you have tens of thousands of dollars in student loan debt and a mortgage and your goal is to become debt-free in 12 months, we are kindly urging you to settle yourself down. Setting too big of a goal provides a breeding ground for stress and potential (nay ... probable) failure.
Instead: Work toward chipping away at specific debt. If you've got some debt that you could feasibly start paying more on in order to eliminate it under a tighter timeframe, try that.
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Sometimes savings goals can be too big of a mountain to climb. When you set your New Year's resolution, force yourself to remain realistic and don't spread yourself too thin. By setting a savings goal you're actually going to be able to reach, you're also setting yourself up for success.
Instead: Plan your budget before you plan your savings goals. The two go hand-in-hand. However much you're able to feasibly and comfortably save, make that your resolution.
It's a just-fine notion to want to cut back your expenses, but don't cut back so much that you cause yourself grief along the way. If you want to eliminate dining out, streaming services, retail therapy, and any other expense not vital to survival, you might just suck all the fun right out of your life.
Instead: Think about which things you're spending money on that don't add much value to your life and weed those expenses out.
