Paying for your new year resolutions
Today is the day we set forth, full of fresh hope, determined to stick to the New Year's resolutions we made last night that are going to improve our lives.
David Kneebone, executive director of the Commission for Financial Literacy and Retirement Income, is all for setting goals.
But whether we're vowing to trim our waistlines or cut out the cancer sticks, he wants us to factor money into the equation too.
"Making a plan for the year is great. But making sure you can afford that plan...is just as important."
Here's a few examples of the financial implications of popular New Year's resolutions:
1. Lose Weight
As our pallid and pudgy flesh is ruthlessly exposed by the summer beach weather, getting fit and losing weight become big priorities for many.
If you do make a plan to lose the love handles, you need to be sure you can sustain it financially.
"Sometimes it does require a bit of commitment in terms of the gym, or new equipment, or a variety of other things," says Kneebone.
Gym memberships alone are typically as much as $500 to $1000 a year, for example. Factor it into your budget before you get gung ho about carving out a beach bod.
2. Quit Smoking
Positive lifestyle changes, on balance, are going to save you cash rather than cost you. Smoking is a particularly expensive vice.
"Quitline estimates that a pack a day will cost someone around $4500 per year," says Kneebone. "What would you do with that $4500?"
Rather than frittering the windfall away, put it towards savings, debt reduction or something meaningful.
3. Eat healthy
"Sometimes even a dietary change can make quite a difference," says Kneebone.
If you've decided to ditch the fast food and start cooking fresh you'll likely save some coin.
Someone Kneebone knows is going through a major diet shake-up, part of which involves cutting out booze.
"If you were buying three bottles of wine a week, and now you're not, that's $30 or $40," he says. Again, use it constructively rather than wasting it on something else.
4. Take a Break
Planning a bigger or better holiday, or just taking more time off, are always popular goals.
"Setting the goal in January that you're going to have a break in October is excellent," says Kneebone.
"It's even better if you get to October and you've got a few thousand dollars in the bank to pay for it – and you're not loading that on a credit card."
Whatever your intentions are, plan for them right from the start of the year and start saving now if need be.
5. A Fresh Start
The new year is a time of change, to cast off the old and maybe realign your direction in life.
"If you're changing schools or changing job, there are distinct expenses associated with that," says Kneebone.
It's important to think those through and reflect on them. For example, the financial change could be as simple as having to travel a bit further and spend $20 more on gas each week. Over a few months it adds up, so factor it in.
New Year's resolutions can be purely financial too - wiping out credit card debt, or reducing a mortgage term for example.
Every January, traffic to the Commission's Sorted.org.nz website spikes dramatically as people hash out their financial affairs or update last year's plan.
The key to setting goals is to make them specific and realistic with a set timeframe, says Kneebone.
Make sure you get buy-in from the people around you, and reward youself when you tick them off:
"It may be just spending $5 on yourself or it may be something quite substantial- only you know what's appropriate."
Some people think about money first and foremost with any decision they make, while others rank it well down the list.
"There's no right or wrong answer," says Kneebone. "We just want to make sure that you are considering the financial impact of what you're doing."