Sticking to your financial resolutions
New Year's resolutions typically involve some form of self-improvement, and money habits figure prominently on that list. This year, along with the usual post-holiday debt, there are fears about the global economy, making financial resolutions more important than ever.
Budgeting advice is pretty easy to find -- everything
from brown-bagging it at work to cutting up your credit cards. But
how do you stick to your financial diet as the weeks go by and the
commitment you felt at New Year's turns into mid-winter blahs in
need of a shopping fix?
For Vancouver's Katie Dunsworth, the answer was a tried-and-true one used by people trying to lose weight or kick a bad habit: she and four of her friends with similar financial woes formed a support group, calling themselves the Smart Cookies. Instead of losing pounds, the women set out to lose their mounting debt and gain better financial management skills.
"Together, we had over $50,000 of consumer debt," says Dunsworth. "We started a money club and met regularly to talk about our finances. We showed one another our bank and credit card statements and held each other accountable for making changes."
The five women were so successful at decreasing their
debt and increasing their financial worth they've turned it into
a business with a recently published book, money club website
and weekly television series.
Get rid of guilty secrets
The Smart Cookies' approach points out one of the biggest stumbling blocks to keeping financial resolutions: secrecy. There's a lot of self-imposed guilt attached to poor money management and debt. By taking it out into the open and talking honestly about your situation, the emotion (in this case, guilt or shame) decreases, and the more rational planning approach takes over.