You know it’s important to have something to work toward when it comes to your money.
Unfortunately, New Year resolutions are unlikely to result in long-lasting changes. According to research reported by the American Psychological Association, nearly 60 percent of people drop their resolutions six months in.
So what does that mean when you set money goals? Chances are, you will give up on your financial goal before it’s realized — unless you take steps to set financial goals you can actually keep.
1. Stop making a laundry list
It’s tempting to sit down and list all the things you want to accomplish, but a laundry list isn’t the same thing as setting an actual goal. It’s often unspecific — it might describe the desired result (say, pay off your credit card) but it doesn’t tell you how to get there.
When you set financial goals, get specific. According to research from the University of Maryland, specificity can help you better measure your performance.
Rather than listing something general like “save more for retirement,” set a specific goal: “I will set aside $100 a month for retirement.” That specificity gives you something more concrete to work toward.
2. Choose an attainable financial goal
You’ve probably read great stories about people paying off thousands of dollars of debt in short periods of time. While those stories are inspiring, they might not be realistic for you.
Instead of saying you’ll pay off everything in six months, create a plan that focuses on attainability. Be brutally honest with yourself about what it will take to move forward.
Rather than say you’ll repay $20,000 of debt in the next 10 months, make a goal that reflects your financial situation. Maybe you can realistically put $300 a month toward debt reduction. It might not make you debt-free in a year, but it will help you make a dent and you’ll feel progress.
3. Work on one financial goal for the year
I used to set financial goals with several aims, and I was always lucky to complete just one goal by the end of the year. When I modified the number of goals I set, things changed.
Instead of setting multiple money goals, I chose one thing to work on for the whole year. One year, I decided I wanted to refinance my home. There were preliminary steps I needed to take, so it wasn’t as simple as just getting it done in January. It was a year-long process.
Another year, I wanted to max out my Roth IRA contributions each month. I knew I needed to contribute about $450 a month. I couldn’t start that immediately, but I spent the year increasing my contributions by a little extra each month, gradually building to $450.
Figure out your most important money objective for the year, and focus your energy on that one thing.
4. Set incremental goals that build
My “one financial goal for the year” employed a secondary goal-setting strategy: increments.
Figure out how to make your goals incremental so you can build on your previous progress. The great thing about money is that it’s relatively easy to set financial goals that are incremental in nature.
Want to build your emergency fund? Make a goal to start small and then increase your savings throughout the year. Plan to get rid of debt? Slowly increase how much you put toward the goal. You can encourage yourself to look for new ways to save and apply those savings to paying down debt.
As you reach various milestones, the success you feel can motivate you to make greater efforts.
5. Create accountability
One of the best ways to stick to your financial goal for the year is to create some sort of long-term accountability. Research reported in the American Economic Journal: Applied Economics found that long-term commitment contracts with real accountability resulted in lasting behavioral changes.
You can do something similar. Tell others about your money goals and ask them to check in with you, or find an accountability partner with similar goals. If you have a life partner, you can work on your financial goals together.
The idea that you have to report to someone — and possibly experience an immediate consequence — can help you stick to your goals.
6. Consider a theme instead of a goal
Last year was the first year in a long while that I didn’t set financial goals. Instead, I explored my life and purpose for a year. Before long, I realized that I had a theme.
I liked it so much that instead of setting resolutions for 2017, I’ve decided that my theme will be “grow.” This includes growing my business, which should help me financially.
This breaks the rule of being specific, but that doesn’t mean failure is imminent. To accomplish my growth theme, I’ll have to set smaller goals.
One of the things I like about the theme idea is that it leaves room for me to set goals, achieve them, and set new targets. Rather than getting me to set goals I’m not sure about, I can set goals that help me live by my theme.
7. Don’t limit yourself to the new year
Too often, we get so hung up on New Year’s resolutions that we forget something: We can set financial goals and improve all year long.
So what if you feel like a failure by February? No reason to let your finances languish for 11 months. Wake up tomorrow, set a new (better) goal, and start working on it.
Improvement should be a year-round process. While a new year is a great time to reflect and commit, don’t get caught up in it. Use it as a time for guidance, but never stop working to improve your financial situation.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.57% – 6.97%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|