5 easy steps to achieve your financial New Year resolutions!

75% of Luxembourg’s residents’ state that they intend to have a Financial New Year’s Resolution. Are you one of them? Do you also tell yourself: “well I did not achieve 2013’s resolutions and I am planning 2014’s…”? Even if 2014 has already started, it is not too late to rethink your Financial New Year’s Resolution, keep reading to get started in the right direction!

1. Be specific about your financial resolution. 

If you set a resolution such as reduce debt or increase savings, it might be difficult to change your behaviour to achieve it. Be more specific! First, you will need to take some time and do the budgeting basics by listing your fixed and variable expenses. Do not forget to foresee an annual amount for unexpected events. Once you have a clear view of your finances you will be able to identify what your financial goal has to look like: build an emergency fund by saving a certain monthly amount, accumulate savings for a specific goal, reduce debt to a certain level, etc.

2. Measure, measure and measure. 

Setting an amount might sound like a difficult task, but it’s not! It will help you to check along the year if you are in the right path to achieve your goal and in the end to check if you have actually managed to achieve it. The more often you measure your status the more motivated you will be.

3. Take one step at a time. 

Breaking down your goal in smaller and quantified steps will allow you to check its feasibility with regards to your budget. If you think about a savings plan, for instance, you might decide to set up an automatic savings plan or to save a smaller amount the first half of the year and a higher amount once you have acquired the habit. Having a clear budget will help you to plan better. For example, you will be able to identify the months where you need to pay more attention to your spending because of holidays, birthdays or other specific events, and you could prepare for those moments by making a bigger effort in other months.

4. A realistic goal is the best way to get you motivated. 

You can go for an ambitious goal but only go for it when you are fully willing to pursue it and have the ability to do so. It might be helpful to tell your closest family and friends about the goal you are willing to achieve. They could be your coach to motivate you and remind you of your goal in those moments where you might be “forgetful”. You could even schedule a review with your coach on where you stand with regards to your goal at a specific moment of time. This helps to keep up the motivation.

5. Set a deadline for your goal with a special treat or even a small celebration – it’s a must!

Last but not least, get started now; focus on your agenda and the moment you will start preparing your financial goal. Do not underestimate this; it takes some time to gather your budgeting papers. If you are in a relationship, consider sitting together to discuss with your partner and agree upon financial goals both of you are absolutely willing to achieve.
Finally do not forget that your banker can be a good adviser in this task. He might give you some tips on how to make sure you are able to save on a regular basis or how to best manage your debt.

Kick off now your financial new year’s resolution and let us know how you are doing!

Articles that might interest you

  • Often you hear people say: “Anyway, until I have paid off my home loan it’s the bank who owns my house”. But is it true?

  • It is always the same question that every one of us is asking before signing a home loan with his bank. To gain a more objective overview, let’s analyse them one by one with their respective advantages and disadvantages.

  • The rate remains fixed for a pre-defined period and, at the end of the period, is subject to a revision. The pre-defined period can vary from one bank to another but is generally 3, 5 or 10 years.