Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.
This week’s question is from Leslie in Indiana. She asks: It’s that time of year again: New Year’s resolution season. Every year I make a New Year’s money resolution, and every year I fail to achieve it. In 2020 I REALLY want to pay off my debt and keep my resolution, but I’m not sure how. What advice do you have to help me keep my money resolution?
Follow the SMART acronym for goal-setting. Your financial goals should be specific, measurable, achievable, realistic and time-bound.
Break your goals into smaller, achievable steps. It can be overwhelming to have a huge goal. When you break it into smaller chunks, it doesn't feel insurmountable.
If you’re working on paying off debt, you first want to get organized by seeing all your payments in one place. Then, you can choose the debt snowball method, where you pay off your smallest debts first, or the debt avalanche method, where you pay off your highest interest rate debts first.
Check in with yourself. Consider putting quarterly reminders on your calendar to check in with yourself or with a partner to see if you’re on track and make adjustments as needed. Consider using a budget worksheet to keep track of your spending and see how it fits into your goals
Reward yourself for your progress to stay encouraged. Reaching goals should feel good, so make sure to give yourself some treats along the way. Also, read more about strategies for success.
More about money goals on NerdWallet