It’s the time of year to make New Year’s resolutions. Unfortunately, 80% do not achieve their resolutions. Despite these alarming statistics, the tradition of “making firm choices or not to do something or not to do” is still the popular New Year preparation activity.
As you start visualizing and creating your vision boards, here are four financial New Years resolutions to avoid, as well as tips for creating goals that you can actually achieve.
Avoid these financial New Year resolutions
1. Be debt free
The average American has a personal debt of about $ 40,000, with the average student loan debt exceeding $ 35,000 excluding mortgage debt. Debt free is a formidable goal in life. However, it usually takes more than a year to accomplish this feat. It may take longer than expected to deal with the mountain of debt that has accumulated over many years or decades.
Instead of specifying a vague debt-free solution itaming certain debts or an amount that needs to be addressed and focusing on paying off or paying off the new year. Achieving the settlement of every debt gives you the encouragement you need to continue on your path to debt freedom, especially during troubled financial times.
2. Cuts in spending on cold Turkey
The abrupt and full nature of becoming a “cold turkey” usually leaves people feeling deprived and defeated when they fail, especially for funders. When this happens, many feel angry and have a tendency to cheat or “kill” the turkey and indulge themselves, causing them to overspend.
Instead of making the blank “Cold Turkey Spending Cuts” resolution, rCut down on excessive spending from every day to a few days. When you’ve got used to minimizing your excessive spending to just a few days, add a day or two more to your less-spending days. You may not need as much of the things you spent on as you thought.
You should also convert excessive spending into behaviors that will improve your financial situation. For example, eating out every day is the leading budget buster. Instead of eating out every day, prepare your breakfast, dinner, or lunch two to three days a week. Or buy your favorite snacks or drinks in bulk and tuck them away at your desk instead of entering the vending machine at work. Every time you grab a snack or drink from your supply, add the money you would have spent in a savings jar. When the jar is full, put it in a savings account or use some of it to pamper yourself.
3. Insurmountable savings goal
It’s ideal to save hundreds of thousands of dollars on a rainy day, fantastic vacation, or excellent business opportunity. However, if you set a savings goal of $ 100,000 in a year when your salary is $ 60,000 or less, the bar may be a little too high. If you don’t achieve the goal, you may feel defeated. Having goals that are challenging is great, but setting goals that seem unachievable is emotionally dangerous.
Instead of making insurmountable savings decisions, set a SMART set (specific, meaningful, achievable, realistic and timed) that requires a positive change in behavior and discipline. Start with a savings goal of at least $ 500 to $ 1,000 or one month of your salary. When you achieve that goal, set a new savings goal that will require more effort. A seemingly small savings goal can become a substantial cushion for your future and current financial freedom.
4. Quit your job to start a business
Hating your job is NOT a good reason to quit your job to start a business.
If you don’t like your job or are not satisfied, you may need to find a new job. However, if you’re looking to start a business, keep your job throughout your entrepreneurial learning curve. Your job is your company’s first corporate sponsor. Not only will your salary pay the bills and keep your lifestyle going, but it will also help you fund the necessary business start-up, startup, and coaching costs.
Instead of rushing to fire your boss to start a business solution, start a sideline. Will a “Dualpreneur “ (Employees and entrepreneurs). Take advantage of your job and steady flow of income as you grow your part-time job into a profitable, legitimate business that can ultimately exceed or replace your salary.
This article was originally published on December 5, 2019.
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