For many Americans, the only area where they may have lost weight over the holidays is their wallet. And as their credit card statements begin to arrive with the reminder—and obligation—of their holiday spending, consumers should resolve now to lower their debt in the New Year.
“Losing weight and losing debt are among the top New Year’s resolutions every year,” says Joseph Montanaro, certified financial planner with USAA, a leading financial services organization serving military members and their families. “But, unfortunately, the resolve of consumers to stick to their plans typically thaws along with the weather when spring rolls around.” His suggestions include:
- Start with a specific goal. Start small, and add incremental goals along the way. Set new goals with each milestone you reach.
- Put the plan on paper. Establish a realistic budget, and stick to it with each paycheck.
- Track progress. Continually tracking progress over time will help keep the overall goal front and center, and allow for budget adjustments as more money is freed up over time.
- Splurge…in moderation. While keeping a focus on reducing debt undoubtedly will require some sacrifice, it’s OK to splurge on a reward for a job well done from time to time.
- Save like there is a tomorrow. Spend less than is earned so there will be money left over to save. With that extra money, consider increasing contributions to a 401(k) or IRA, and start saving more for everyday expenses and emergencies by setting up a monthly automatic transfer into a savings account.
