The start of the new year is the most popular time to set new intentions, goals, and resolutions. Sticking with a change is another story: only 7% of people keep up with their resolutions for 12 months or more. Part of the challenge with keeping resolutions is that many people rely on their willpower. However, taking a one-time action can help you change your behavior and achieve your financial goals—no willpower required.
Set up automated savings
Automated savings have been an effective method for helping people save for the first time and grow their savings larger than ever before. With a few clicks of a button, you can ensure that you are saving regularly without needing to decide at the end of the month how much you can (or can’t) afford to set aside. Start by choosing an amount that you feel comfortable with, ideally based on a close look at your income and expenses. You can always increase it or decrease it in the future but saving will be your default.
Cut up your credit card
One of the hardest parts of getting out of credit card debt is breaking up with your credit cards. It’s so convenient and comforting to have them as a backup, but cutting off your access completely makes it much more likely that you’ll stick to your plan. If you aren’t ready to cut up your cards, at least take them out of your wallet so you aren’t tempted to spend when you’re out, and remove all of your saved payment information from retail websites and apps.
Delete that app
When it comes to spending, retailers try to make it as easy as possible for you to buy from them. The rise of shopping apps and one-click buying removes friction from the buying process, which encourages you to spend more. Deleting the apps that you tend to reach for to make purchases without thinking about it can add a layer of friction back in.
Sign up for an automatic 401k increase
Increasing your 401(k) contribution is often a fraught decision. When should you do it? How much should you up it? Some 401(k) plans offer the option to automatically increase your 401(k) contribution by 1% each year up to a certain cap. By signing up for a plan like this, you can accomplish your goal of saving more for retirement each year without thinking about it.
Set up automatic payments
Setting up autopay for your bills will ensure you don’t miss making a payment. This is especially important for credit cards and loans because your payment history has the biggest impact on your credit score. Ideally, you could set it up to autopay the entire balance so you never end up paying interest, but if you aren’t in the financial position to do that yet, auto-paying the minimum will keep you in good standing. If you are working to pay down your debt and you’ve budgeted a certain amount per month, you can set your account to autopay that exact amount.
