So you already broke your financial new year’s resolution. Now what?
The champagne has long been glugged, the confetti has been vacuumed from the carpet, and the noise makers have fallen silent. So have your new year’s resolutions stuck around now that the party’s over?
I commend all of you out there who made getting your financial life together a top resolution. I’m here to help, but it’s a sad fact that resolutions are made to be broken. If you’ve already let some of your new year’s financial goals fall by the wayside, I’m going to cut you some slack—and give you some simple shortcuts to overcoming resolution hiccups and maintaining momentum toward better money habits this year.
Broken resolution #1: Sticking to a budget
Budgeting is probably the most basic personal finance goal out there—and also one of the hardest for people to accomplish. It sounds simple: You track all your money going in and out, stick to set amounts for each spending category, and have more left over to meet financial goals like saving for retirement or paying down debt. But then comes the day when you forget to bring lunch to work and splurge on a $16 salad. Or that happy hour that becomes a happy-two-hours with a $40 bar tab. Or that visit to urgent care that you throw on a credit card, figuring you’ll deal with it after your winter cough goes away. At the end of the month, you find yourself wondering where all your money went.
The resolution hack: One word: Automate. When people come to me with their broken-budget woes, my top-line advice is to limit the amount of spending money available by setting up regular automatic transfers to a savings account (or automatically funneling a percentage of each paycheck into savings). It’s like switching from three cups of coffee a day to two; it might seem like a headache at first, but soon you’ll learn to live with less. You won’t notice the “missing” money because you never really had it.
Broken resolution #2: Spending less on dining out
There are many reasons Americans are spending ever-increasing amounts on restaurant dining—convenience, peer pressure, addiction to burrito bowls and biodynamic salads served in a fast-casual atmosphere. And it’s adding up: On average, we shell out over $ 3,000 on takeout and restaurant meals every year. Whether your restaurant expenditures are way above or way below that number, this is a not-so-necessary expense. You know you’d save cash by cooking all your own food at home, but one cannot live on leftovers alone. Sometimes you want to live a little.
The resolution hack: My Burger Rule applies as much during hot toddy and chicken soup season as it does during the days of barbeque and cool drinks. The basic idea: Cut your restaurant budget in half; watch the remaining funds go way further on home-cooked meals. Check out the full how-to here.
Broken resolution #3: Squabbling less about money with your partner
The holidays can be a peak time for money stress. And after grinding it out from Black Friday sales to post-Christmas credit card bills, your nerves might be a little frayed. So butting heads with your partner over financial decisions—especially if one of you was pinching pennies and making smart year-end tax moves while the other perused end-of-year cyber deals—is understandable. You both agree it’s time to turn over a new leaf, but those credit card statements aren’t getting any smaller. How are you going to keep your cool?
The resolution hack: Okay, you’ve fought about finances with your partner. But have you actually talked with them about your money values and worries? This might not seem like a hack, but hear me out. Instead of waiting until the next time you’re hurling insults over a bill, schedule a date night. Order a glass of wine, get comfortable, and have a conversation about your financial goals as a couple. Your spouse might not realize that your budget concerns come out of a desire to upgrade your living space, or to save up to buy a place of your own. It’s so important for couples to get on the same page about money. And talking is one simple thing you can do to make everything easier going forward.
Broken resolution #4: Doing allowance right
All parents have been there. You set up a chore chart; you came up with a weekly schedule; you sat the kids down and told them they’ll get a dollar for making their beds and two bucks for walking the dog. This was the year you were finally going to do allowance right. You all stuck to the plan the first week; but the second week came and went, work was busy, and everything fell by the wayside. Plus, your 8-year-old decided that 50 cents isn’t worth the hassle of making his bed every morning. Best-laid plans, huh?
The resolution hack: Parents come to me in a panic about allowance all the time. I am happy telling them to chill out. When it comes to allowance, there is no Holy Grail plan. Believe me, I looked for one while writing my book Make Your Kid a Money Genius. And yet, after poring over dozens of studies from around the world, I found there’s no scientific consensus on the best way to give your kid pocket money. But I do know there’s one thing you shouldn’t do, and it might blow your mind a little: Don’t pay your kids for chores. Why? Research shows that kids who do unpaid chores from a young age are more likely to achieve life milestones like graduating from school. If you tell kids we empty the dishwasher or walk the dog because it’s important to contribute to the family, it will help to build their intrinsic motivation. After all, money shouldn’t be the reason we do everything. Keep allowance a separate matter—and please, don’t worry about it too much.