It’s the beginning of a new year, and setting that yearly budget could be a lot. Financial psychologist and Creighton professor Brad Klontz said, the first thing you should do is identify your top three financial goals.
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new year’s financial resolutions
“Visualize those goals, this is a very powerful psychological trick. Don’t just think, ‘Oh, I need a savings account.’ What is this thing for me? Make it attached to your values,” said Klontz.
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He said it’s best to automate those payments and have them out of sight and mind.
“Get automatic movement from your checking account to that savings account or from your paycheck to your 401K. Set it in motion,” said Klontz.
Nicka Johnson is the CEO of Budget to Success. She said if you want your budget or savings plan to work, you have to be serious about it.
“It’s truly important to make for sure that you’re not only budgeting, but you’re also saving, which I like to say is paying yourself first,” said Johnson.
One thing she recommends is being practical about budgeting, saying when you’re writing your budget, know the real numbers for your income, debt and expenses.
“Practical steps, what you can do is every day, if it was from three to five minutes, look at your bank statement. You have text alerts, online banking, mobile banking but also paying attention to what’s authorizing through your account as well,” said Johnson.
Klontz and Johnson recommend using apps to help you budget, but when it comes to those popular pay-in-four-option apps, they said to stay away.
Some other tips include avoiding lump-sum investments, contributing smaller amounts into your 401k, then increasing it over time and making saving fun to really challenge yourself to meet your financial goals.
“Personal finance is pretty boring, and I think it’s useful to make it exciting,” said Klontz.
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