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Forget ‘spend less’ or ‘save more.’ Make this your No. 1 financial resolution for 2024

By Jeanne Sahadi, CNN

New York (CNN) — You may think that improving your financial life is simply a matter of taking unpleasant but necessary steps: Curb spending. Cut debt. Make more. Boost savings.

But, in real life, if your money resolutions for 2024 are just a long list of financial chores that you know you “should” have been doing but haven’t, you’re likely to ditch the plan by your third pot of coffee in January.

Here’s why: When it comes to managing our money, regardless of our net worth, there is usually a persistent gap for most of us: We know what we should do, but we struggle to actually do it.

“If you have the key fob to the gym, it doesn’t make you fit,” said Ashley Agnew, president of the Financial Therapy Association and director of relationship development at Centerpoint Advisors.

It’s hard to get motivated to do anything when you’re just doing it because you think you “should.” When it comes to improving your finances, staying motivated is much easier when you’ve honestly assessed what makes you feel content and secure in life and then figured out how to use your money to foster those feelings.

So make just one financial new year’s resolution for 2024: Figure out what financial well-being means for you. It will be a highly personal endeavor. Then pick one or two steps to improve it.

Here are seven ways you might define it and improve upon it in the new year:

1. Create a greater sense of ease

Money helps mitigate uncertainty like emergencies, job loss, illness or premature death. Hence the desire for rainy day funds and insurance.

How much you’ll need for either depends on your circumstance. To help figure out what is right for you, familiarize yourself with what your life today costs, so you know what baseline you’re working with, Agnew suggested.

Beyond reviewing your monthly expenses (food, housing, utilities, health care, debt payments, subscriptions, etc.), map out when those and other anticipated expenses will arise. She recommends drawing a quadrant, and labeling each box with a season. In each season’s box, include your regular expenses plus special ones like birthdays, weddings and vacations, or scheduled expenditures like a roof replacement or tuition bill.

Doing so will make it easier to see how much you’re really spending, what you can cut if need be and where you might be able to free up money to do something you’ve been avoiding but that might give you peace of mind. For instance, if you have young kids, you might make 2024 the year you buy a low-cost life insurance policy so you know you’ll be able to provide for your family when you’re gone.

No one wants to think about their own death, but avoiding the issue just makes things harder on your family. “Avoidance will prevent you from taking a deep breath. You can avoid the action but you can’t bury something completely when it comes to money,” Agnew said.

2. Spend in ways that are true to who you are, not others’ expectations

Beyond creating a greater sense of security, financial well-being is about using your money as you wish.

So look at where your money goes. Does it reflect what you really want? Or do you spend some of it living up to the standards and expectations set by your parents or society? For example, maybe you got a bigger, more expensive home than you feel you need or you feel an unspoken pressure to buy more expensive brands. Or maybe you spend too much on your children in ways that aren’t really that meaningful to either of you, or which your adult children take for granted.

“We live in a world of comparison. It can be difficult to live up to someone else’s financial standards,” Agnew said.

3. Buy yourself time

Financial well-being is also about reallocating the money you have in ways that serve you better.

“Sometimes it isn’t about adding more. It’s about subtracting. Sometimes it can be, ‘How can I spend my money to do less?’” said Meghaan Lurtz, learning and development specialist at Shaping Wealth, which trains financial professionals to help their clients achieve “funded contentment.”

Lurtz is referring to the fact that time is everyone’s most limited resource. You can use money to buy a little time back if it lets you focus on what is most important to you.

Take house chores and cooking. If they eat up most of your free time outside of work and take you away from being fully present with your young kids at key times of the day, you might consider spending money on a meal plan or hiring a house cleaner to help out once in a while.

4. Express your values

Financial well-being also results when you use your money to express your values in the world through charitable donations or providing a meaningful gift for someone in need — e.g., help with tuition or paying off a medical bill or student loan, etc. Or it can simply be having the capacity to volunteer your time.

It’s not necessary to be a multi-millionaire in any of these regards. “People can be wealthy in that they live within their means and live within their values,” Lurtz said.

5. Don’t confuse what you buy with joy

Money is a tool that can free you from the distress of always having to choose between paying for groceries or paying the electric bill. But beyond allowing you to afford life’s basic necessities, it’s not a magic wand that can buy you deep-in-your-bones happiness.

That’s worth remembering the next time you’re thinking about buying something that was marketed to evoke feelings of a beautiful home, a perfect family or a sense of being on top of the world. Ask yourself, “Is it the thing you want or the feeling from the thing you want?” Agnew said.

6. Focus on what brings you contentment

Take time to envision what would make you feel more content in your life overall because ultimately money should serve you in achieving that vision.

“What do you enjoy? What did you like doing as a kid that you don’t do now?  Everyone has their own picture of contentment. Get in touch with what you want your picture to be,” Lurtz suggested.

Be specific, she said. Envision what would be happening, where you are, how you are spending your time, who is with you and how you feel.

Compare that vision with where you are today. Then come up with a couple of small, achievable goals to move you closer to that vision. For instance, if you used to love playing the piano or painting when you were younger, it might mean committing time to doing that and maybe even some money for lessons. Or if you miss spending time with old friends who live far away, it may mean setting aside some money to travel to see them.

7. Figure out your relationship with money

There are plenty of other ways to define financial well-being for yourself. And you can help keep your new year’s resolution by simply reading a book that helps you think differently about money and its role in your life.

Among the ones Agnew and Lurtz like best are: Mind over Money by Brad Klontz; The Psychology of Money by Morgan Hounsel; and The Geometry of Wealth by Brian Portnoy.

Ultimately, the goal is to figure out what role you want money to play in your life. “It only does what you tell it to do,” Agnew said.

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