Feb 8, 2019 3 min read

Did you make a New Year’s resolution to improve your financial life? Most people who do so have already given up enough, even though they know an upgrade would improve their family. We thought we might reach this point because it happens so often.

The good news is you can plan for change anytime. Here are some steps with which we might experience success.

Improving your financial life may be too general of a goal. Pick a more specific area, such as reducing debt. If you are carrying a large balance on a credit card, with interest rates as high as 20 percent or more, it is almost like dealing with a loan shark. You will never get out of debt by paying the minimum.

A few years ago, credit card companies were required to put on your monthly statement how long it would take to pay off your balance if you made only minimum payments. Often, this is many years.

The first step to get out of large credit card balances is to stop putting new purchases on the card. Don’t buy anything you cannot afford without using cash. Establish some emergency money to take care of real unexpected emergencies.

If you have good credit, you may be able to open a new account with a lower teaser rate, where you can transfer your old balance. Do not continue to use your old card or make additional purchases with the new card.

Once you stop adding new purchases, it is time to start eliminating old balances. Try to pay 10 percent more than you now are. For example, if you have been paying $100 per month toward your balances, pay at least $110. Pay at least the minimum on all cards and apply the entire left-over amount to the card with the highest interest rate.

If you have multiple cards with the same interest rate, pay the one with the smallest balance. This will make you feel somewhat successful because you would have one less account to pay on. Keep paying the same amount, or more, each month.

If you get a bonus or tax refund, put as much extra on the balances as possible. You will have a hard time earning as much as your high interest rate on any investment.

You can apply similar principles to any other financial issues. Always take actions with the end in mind. This means you will feel must less stress when you are out of debt.

Set small obtainable goals, such as having a lower total balance every month. Sometimes, it is helpful to have a spouse or friend as a coach to help keep you accountable. Maybe you can be that person’s coach if they are trying to achieve a similar goal.

There is an old saying that “only a fool would think you could keep doing the same thing and get a different outcome.” If you really want change, you must make sensible changes. Sometimes, change is not easy, but think how it could change your family’s lives.

Gary Boatman is a Monessen-based certified financial planner and author of “Your Financial Compass: Safe passage through the turbulent waters of taxes, income planning and market volatility.”

To submit columns on financial planning or investing, email Rick Shrum at rshrum@observer-reporter.com.