Alternative New Year’s Money Resolutions

By Dave Werle, CFP, CSRIC

If you have already broken one of your New Year’s resolutions, this article is for you. Give yourself a second chance, a do-over, a mulligan.

According to Inc. magazine, approximately 60% of us make New Year’s resolutions, but only 8% of us succeed in keeping them. Sadly, 50% fail by the end of January.

The 92-percenters are not lazy losers. We simply make general and somewhat unrealistic resolutions, like eat healthier, exercise more, or get more sleep. These hopeful goals make it onto our resolutions list every year precisely because we’ve been awfully unsuccessful at doing them in years past.

Money resolutions have their unique place in our culture. According to Inc., the fourth most popular New Year’s resolution is to “save more and spend less.” Personal finance related resolutions are made with good intentions, but that one, in particular, is terribly general and would be far too easy to abandon.

Given the constant bombardment of advertising messages that you really need to buy this or that thing or you’ll end up sad, ugly, or left out, resisting the temptation to spend can feel like resisting the temptation to breathe. Other common money resolutions are “stick to a budget” and “pay off debts.” How boring! It’s no wonder so many of us fail.

I’m a big fan of easy, measurable, and more inspiring resolutions. One broad category of money resolutions to consider is to give more interestingly.

For example, make your resolution this year to give a share or two of stock to each one of your kids or grand kids (easy to do with direct stock purchase plans). Pick out stocks of companies that they would recognize and get excited about.

Also, you can try out making a number of gifts to random strangers this year. For example, pay off someone’s layaway bill at Walmart or pay the bill of someone behind you in the fast food drive-through. Anonymous gifts can have a special magic.

I also like the idea of committing to a “beer it forward.” One pub I’ve visited allows you to buy a pint of beer for a specific person that you expect to show up in the future. When the lucky recipient arrives, they see their name on the board as getting a free beer and also see the donor’s name. That’s very cool, in my opinion.

Another alternative money-related resolution is to invest in something local this year. Make it specific, such as purchasing an annual Community Supported Agriculture (CSA) share from a local farmer, feeding yourself and the local economy.

Consider resolving to move your bank accounts to a local credit union that makes low-cost loans to your neighbors. Resolutions don’t have to be painful!

A more challenging resolution that requires some endurance is to set up a special savings account for one fun goal. The idea is that you would open an account and fill it with automatic monthly transfers from your regular checking account. Just like with retirement savings, making it automatic is critical.

The account would be earmarked for something like a weekend trip to the beach or a hot tub, something fun. Achieving that goal might blaze the trail for some lasting changes in your financial life, too.

For those of you who need one easy resolution to kick-start your year, consider just checking your free credit report. It can be done through annualcreditreport.com and is free. Each of the three credit bureaus allows you one free credit report every twelve months through that website. You could opt to pay for a credit score at the same time, typically for less than $10.

You can then scan the credit report for anything unusual or incorrect and dispute any errors immediately online. If you are feeling ambitious about your resolutions, consider making a goal to raise your credit score by 25 points this year. That’s an easily measurable goal, and your credit score report will actually tell you what specific factors are keeping your score below what it could be.

It’s not too late to get started on some resolutions that move you in the right financial direction. Pick something more engaging, fun and rewarding and you’ll probably have a lot more success.

Dave Werle, CFP®, CSRIC™

Financial Planner

Starks Financial Group, Inc.

440 Montford Avenue

Asheville, NC 28801

828-285-8777

Starks Financial Group is not a registered broker/dealer and is independent of Raymond James Financial Services. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Any opinions are those of Dave Werle and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.