After the ball drops in Times Square and the champagne flutes are emptied, many of us are ready to turn over a new leaf. At the stroke of midnight, people resolve to lose weight, get in shape, pay off debt, and put more money into savings. But could making those resolutions actually be a bad idea?
The National Foundation for Credit Counseling (NFCC) says yes. Here are the pitfalls of five popular New Year’s Resolutions. Don’t make these mistakes:
- Resolving to pay off debt can become a problem if increasing payments to creditors leads to missing other essential payments like rent, mortgage, utilities, food, gas and medicine. Those should all take priority over paying down credit cards.
- Vowing to get in shape and exercise more often leads people to sign up for expensive gym memberships. That’s why so many fitness centers run specials in January. Likewise, pricey exercise equipment could end up collecting dust. Find low or no-cost ways to exercise, like taking the stairs instead of the elevator, running in the park, or walking the dog an extra mile each day.
- Saving money is a laudable goal, but if you’re socking away part of your paycheck instead of paying down high-interest credit cards, it can be a costly mistake. Compromise by putting a percentage of what you plan to put into savings toward credit card debt instead, starting with the card that has the highest interest rate.
- Getting into the investment game to make the most from your money is another common resolution. But if you’re playing the stock market and failing to put the maximum contribution toward your employer-sponsored 401(k) or other retirement plan, you could be missing out on tax advantages and investments that will pay off more in the long run.
- Going back to school to gain new skills may seem like a good idea, but be wary of taking on student debt in order to do so. Student loan debt is at an all-time high, and many people don’t stop to consider the reality of their chances of finding a job in their new field. Before you embark on new career training, think hard about how easy it will be to get a foothold in your chosen career path. If you still want to go back to school, look for grants instead of loans, as grants do not have to be repaid.
“There’s a right way and a wrong way to do most things, and New Year’s resolutions are no exception. Having a reality check, one which includes being honest about your limitations, is key to identifying the proper goals and meeting objectives,” according to an NFCC spokesperson.