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With the year coming quickly to an end, 2020 is a great time to set some new financial goals. New Year’s resolutions are often easier said than done. Although setting attainable goals when we make resolutions is smart practice, the fact remains that most of us who make new year’s resolutions fail to keep them.
Whether you’re looking to save more money towards your child’s education or pay down your credit card bills, here are five ways to set financial new year’s resolutions and make them succeed.
Enlist the help of family
Maybe you are looking to save money for a big purchase, like a downpayment on a house. To help improve your chances of success in meeting your financial goals, it helps if you have someone else to hold you accountable. Turn to your family or close friends to provide you with outside support. Even if it’s just your sister sending you a text message every week to make sure you set money aside in a savings account, it can help.
Keep contributing to an education savings plan
You know how expensive university education can be so you’ve made it your resolution to set more money aside in an education fund in 2020. If you’re a Canadian parent, then opening a registered education savings plan (RESPs) can help you achieve your savings goals. As a provider of RESPs, Children’s Education Funds Inc. (CEFI) has helped thousands of Canadian families find the right RESP for their financial situation. CEFI also has some insight on how to maintain an RESP so you can maximize all of its benefits.
For example, it is always a good idea to reevaluate your budget every few months. If you received a holiday bonus this year or anticipate a raise at work, consider contributing more to your child’s RESP. $50 or $100 more a month can go a long way to paying for your child’s post-secondary education. CEFI also suggests taking full advantage of the Canada Education Savings Grant (CESG) by contributing the full amount of $2,500 per year.
Examine your spending habits
You know how important it is to save extra money into your child’s education fund, but you seem to fall short at the end of the month. The new year is a good time to examine your spending habits and find areas to cut from. If you are struggling to find ways to save, you can start by cutting back on some of your extra-curricular expenses. Sacrificing a few dinners out can pay off in the long run.
Automate your finances
If you’re not regularly making contributions to your savings and checking accounts or retirement and RESP plans, keeping your financial resolutions can be a challenge.
If saving money is your number one resolution, start by arranging automatic deposits to your chosen accounts each time you receive a paycheck. This way, you can dictate how much money you’d like transferred to your account without the need to remind yourself to make those deposits manually.
To enhance your savings, set up multiple accounts for each big savings goal such as an emergency fund, paying off your mortgage and your next vacation.
Don’t get discouraged
If you failed to reach a financial goal, don’t get discouraged, instead pick yourself up and dust yourself off. Everyone fails at one time or another, even the most successful people. By rebounding quickly from failure, you can get your financial goals back on target.
For example, if your goal was to contribute more money to your child’s RESP last year, but you fell short due to unforeseen circumstances, there’s nothing preventing you from contributing an extra $500 in 2020 to compensate for it.
Above all, make realistic resolutions. It’s okay to start small and work your way up. Remember, financial success takes time, so to help make your financial resolutions stick in 2020, lessen your goals to make them attainable and build momentum from there. The bottom line: go easy on yourself. The fact that you are working toward financial freedom in the new year is a smart decision in its own right and one to be proud of.