Taking first steps to fulfilling financial resolutions

For a lot of people, a new year brings with it some hope that they’ll get another crack at making good some resolutions and promises they broke the previous year, especially with regard to handling their finances. But truth be told, it’s not so much as vowing to do several undertakings as taking the first steps that will lead them to that direction.

John Frainee, a personal finance writer for TheChristianDollar.com, says these first steps are much easier to complete than making many New Year’s resolutions people end up forgetting anyway.

He gives these few steps toward fulfilling their financial goals and starting the new year on the right foot:

Begin with a budget. This is a no-brainer, especially for fixed income earners. Frainee says when you start a budget, everything else in your financial life becomes easier to manage.

“The budget is something that gives you a launching point for doing great things with your money,” he says. And if we may add, if something is not in your budget, forget about it until you can afford it, say, until a windfall or a bonus comes along.

Those individual envelopes for monthly bills for utilities, daily gas and bus fare, and food will help you get started.

Save for an emergency fund. Rainy days happen, says Frainee. “Don’t think they won’t happen to you. Start your emergency fund in a separate savings account or money market account. Having something in a separate ‘emergency fund’ will prompt you to put more money toward this goal.”

Many financial experts give this simple tip: Treat this fund as a bill you have to pay every month—perhaps 10 percent of what you earn.

Start getting out of debt. Frainee advises those who wish to properly manage their finances to start paying off their debts, beginning with the smallest balance and ending with the largest balance.

“You’ll feel exhilaration quickly when you pay off your first smallest debt; it’s motivation to keep going! Before you know it, you’ll have all you non-mortgage debt paid off … no more interest payments!” he says.

This also means discarding that credit card mentality, which promises instant gratification, and being more prudent with purchases. The old adage “Live within your means” will keep you from harm’s way.

Start a “giving” fund. Frainee says giving is a great way to put money in perspective while blessing others in the process. He writes: “You’ll experience a special type of joy when you give someone something he doesn’t even expect!”