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How to Actually Stick to Your Financial Resolutions

Jan. 4, 2016
3 mins
A woman smiles while working on her laptop in a cafe

I love the New Year; it’s a fresh start for all of us and the perfect time to set up our goals for the year. Many people are looking to make a positive change in their lives and have set up New Year’s resolutions. For most people, unfortunately, they’ll break them by the time Valentine’s Day rolls around.

As you can imagine, financial resolutions are very popular. Everyone wants to spend less, save more, and pay down debt, but that’s easier said than done. When our credit card bills arrive in January, many of us are left scrambling to pay off our holiday spending, while trying to meet our new saving goals – a recipe for disaster. Here are some tips to help make sure we stay on track.

Set Specific Goals

The biggest problem with any New Year’s resolution is that they usually aren’t specific enough. Let’s take a look at what spending resolution Canadians made in a recent survey from CPA Canada.

  • Pay down debt – 61%
  • Follow a budget for spending – 61%
  • Save more retirement – 52%
  • Save for the 2016 holiday season – 29%
  • Save for their children’s education – 25%

For these types of surveys they have to generalize, but as individuals we need to establish specific and realistic goals. How much debt do we want to pay down? I’m sure we’d like to pay off all our debt this year, but is that realistic? Paying down an extra $100 a month might be a much more attainable goal.

Come Up With a Budget

If we were spending $500 just a month ago on food, it’s unlikely that we’ll be cutting that in half just because we’ve made it a New Year’s resolution. We need to come up with a plan to address our goals and that starts with a budget.

Following a budget only works if we have a realistic one in place; we should take the time at the start of the year to track our spending. By tracking our spending for a month or two, we can see where our money is being spent and make adjustments that’ll reduce our spending while increasing savings.

Make Things Automatic

With that budget in place, we can really start making our money work for us. The odds are we’ve “found” some extra money by deciding to cut out certain spending. That extra money can now be applied to our other resolutions right away.

Saving for our retirement or our children’s education can be easy if we setup automatic payments. What that means is that we can set up our RRSP and RESP accounts to automatically withdraw a set amount of money from our accounts whenever we want. I suggest timing it to right after we get paid so we’re essentially paying ourselves first.

Resist Temptation

The temptation will always be the hardest thing to resist when trying to stick to our financial goals. Admittedly spending money is fun, who doesn’t want shop, drink, and eat out; plus sometimes it feels like a social obligation.

If we have one vice that always gets us spending, then we should try to avoid it so there’s less temptation. That being said, there’s nothing wrong with spending, we just need to make sure it fits into our budgets.

There’s no doubt that sticking to New Year’s resolutions is incredibly difficult. If we set realistic goals, set up a plan, and avoid temptation then surely we can achieve our goals. In the end it’s the small positive changes that will have get us to the places where we want to be.

Barry Choi

Barry Choi is a personal finance and budget travel expert at He has been quoted by media in Canada and the United States including The Financial Post, The Toronto Star, Business Insider, The Globe and Mail, and has appeared on HuffPost Live.

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