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How to Make Your Money Resolutions Stick

Jeanne Kelly

At the beginning of every year, many people create New Year’s resolutions to help them develop good habits in different areas of their life — like losing weight, quitting smoking and getting more exercise. We outlined a few credit-related resolutions to help you develop better credit habits. Hopefully you added a few of those to your own and have scheduled time weekly to work on those resolutions.

But here’s the problem: Four out of 10 people give up on their New Year’s resolutions, according to a recent poll. Often, people pursue their resolutions with diligence in the first few weeks of the year, and then grow weary of the extra focus and let them go. (Just ask anyone who goes to the gym regularly — they’ll tell you that the gym is packed in the first two weeks of January and then it goes back to normal for the remaining 11 1/2 months of the year.) And this decision could cost you hundreds or even thousands of dollars!

That’s because there is a very real cost to dropping good credit habits. Here are some approximate numbers to illustrate what I mean: A lower credit score can make a difference in the interest rate you get on a mortgage. Think about it — a 1% bump in the interest rate you pay can add an additional $200 to your monthly payment for an additional $50,000 in interest over the lifetime of a 30-year, fixed mortgage of $200,000.

Those are example numbers — not an exact quote — but they illustrate the cost of the decision to drop good credit habits. Keeping track of your credit score is a quick indicator of whether you’re on track to save money in the long run, and one way to do that is to check your score for free using the Credit Report Card once a month. You can also get a free credit report from one of the three major credit reporting bureaus by going to AnnualCreditReport.com.

If you have already adopted some New Year’s resolutions to boost your creditworthiness, you took a smart step toward making improvements in your credit habits. However, those good credit habits are now at risk of being dropped. Here’s how to avoid the costly result of dropping your resolutions. Check in with yourself on Jan. 15, when the excitement of your resolutions might be starting to fade:

1. Mark the date on your calendar. Remind yourself to push through that date and stick with your plan. (While you’re at it, mark Jan. 31 on your calendar to check in with yourself again).

[Related Article: 7 Gifts You Should Give Yourself]

2. Create post-Jan. 15 action steps. You can do these in the next 2 to 3 weeks to help you move forward on your credit resolutions. You’ll be less likely to drop your good credit habits if you know exactly what needs to happen.

3. Remind yourself of the cost of dropping your resolutions. Although the above numbers might not be the exact numbers for you, understand that choosing to ignore good credit habits means that Jan. 15 is the day that you choose to spend tens of thousands more on your next mortgage.

It is startling to think about the numbers in this way, but pushing through the January resolution-dropping phase can help you achieve your credit goals and can save you a lot of money over time.

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