Personal Finance

Clean up your financial act in 2017 with these 4 steps

How to become financially fit in 2017
How to become financially fit in 2017

While many Americans start out the year with good financial goals, a third of them expect those resolutions to slip through the cracks.

Those were the findings from a recent survey by LearnVest, an online provider of financial planning services. The New York City-based firm polled 1,000 U.S. adults between Dec. 1 and Dec. 6.

In all, 56 percent of survey participants said they plan on making at least one financial resolution for 2017. The top three goals are to save more, reduce spending and pay down debt.

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On average, individuals give up on their financial resolutions just six weeks into the new year, according to the survey.

"When we want to accomplish something, we're good at setting goals," said Alexa von Tobel, founder of LearnVest. "But we don't do that with money."

Here are four steps to help you stick with your money resolutions through the whole year.

1. Set your goals

Saying you want to make a budget doesn't cut it.

In order to meet your financial plans, you'll need to identify a goal that you can work toward.

If you want to save a particular amount or pay down some debt, identify exactly how much it is. From there, you can figure out the next steps you'll need to take.

"Specific is 'I want to pay off $9,000 of credit card debt, and that means I need to pay $800 a month,'" said von Tobel.

2. Make a plan

"Not having a plan is a plan — it's a bad plan," von Tobel said.

Don't work off-the-cuff to meet your goals. Instead, think about how you'll have to adjust your spending every week and every month so that you're making steady progress.

When you build a financial plan, you're figuring out where your cash goes in a month.

For instance, how much of your after-tax income is paying for essentials, including rent and utilities? How much of your monthly income can you apply toward reaching your goals without depriving your household?

Don't forget your basic needs, von Tobel said. Things you shouldn't shortchange include health-care coverage, homeowner's or renter's insurance, and life insurance, particularly if you have a mortgage or dependents.

Another essential would be to set aside emergency savings.

To that point, von Tobel estimates that a single household could get by on savings that can cover three months of expenses. You'll need to save up for nine months of expenses if you're a high earner and 12 months if you have a family, she said.

3. Maximize your future

After you've determined what you need to do each month to meet your financial resolutions and you've shored up your basic security needs, start thinking about larger goals: What can you do to accumulate wealth?

This can include investing, paying off student loans so that you can put that money to work elsewhere, or buying a home, said von Tobel.

4. Have the talk

Three quarters of people polled by LearnVest said that talking to someone about a New Year's resolution would make them more likely to stick to it.

The best way to put your plan into action is to sit down and talk about your goals with someone who will hold you responsible. That can be a friend, your partner or if you're ready — a financial planner.

"Those money talks are complicated because they aren't really about the money," said von Tobel. "This is about what you want your life to look like."

Give yourself reminders to stick to your resolutions.

"If you write down your goal, you're more likely to achieve it," said von Tobel. "Write it on a Post-it note and stick it on the mirror so you see it when you brush your teeth every morning."