Since New Year's resolutions are usually broken within a matter of days, financial experts say it's best to lay out a feasible plan that won't leave you feeling overwhelmed. NY1's Tara Lynn Wagner filed the following report.
When it comes to New Year's resolutions, better money habits ranks right up there with better eating habits and often with the same result.
"I think every year people make resolutions to try and improve the way they manage money and of course most people fail miserably. They get to the end of the year, they find they haven't saved what they thought they were going to save, they haven't invested more intelligently. All in all, their finances are still a mess," says Jonathan Clements, Citibank's director of financial education.
Happy New Year, everyone! But here's a thought. How about in 2014, we try to buck that trend and follow through with the personal finance promises we make at midnight? The path to success is a lot less windy if you have a concrete destination in mind and experts say it helps to make your resolution very specific.
"Well for instance, you might say to yourself, 'Okay I’m going to save precisely 10 percent of my income in the year ahead.' A great way to do that is to setup payroll deductions into your employer’s 401k plan. Once you set it up, it’s going to be on auto-pilot, there’s a certain level of inertia that kicks in and hopefully you’ll meet your goal," says Clements.
Also, don't keep that goal a secret. Paul Golden of the National Endowment for Financial Education recommends sharing your resolution and your progress with a financial buddy.
"So this is somebody who, you don't have to share all your financial details with, but it's somebody who is gonna understand where you are coming from, the goals you're trying to accomplish and they can actually hold you accountable. So a financial buddy can be a really effective tool," suggests Golden.
And just like you won't lose weight if you take in more calories than you burn, you won't reach your financial goal if you spend more money than you make. Clements says before you move forward, take a hard look back.
"Think about all of the money that you have spent over the past year. Think about which of those items gave you real pleasure and real use, and which of them were just throwaways. Figure out what the throwaways are, and get rid of them in 2014," recommends Clements.