When it comes to New Year’s resolutions, focusing on your personal finances ranks up there with eating healthier and hitting the gym more often. And even though most people abandon their annual goals by February, according to a recent study by psychologist Michelle Rozen, it’s not too late to set the stage for success.
The number of consumers pledging to get their personal finances in order this year rose to 48%, a survey by Allianz Life Insurance Co. found. That’s an increase from the 43% who expressed plans to better manage their money in 2022 and 33% in 2021.
The key is planning, said Ed Gjertsen, founder and CEO of Engage Wealth Group in Northfield and former president of the national Financial Planning Association.
“Society allows us to spend in ways that are not always healthy for us, so it’s important to be honest with yourself,” he said. “Eighty percent of what I do is psychological. It is not overly complicated.”
He urges anyone who is unhappy with their finances — and might have made mistakes or poor decisions — to think less about the past and focus on moving forward.
Getting buy-in or support from family members can make the process easier.
Barbara Levine, a Northbrook resident and client of Gjertsen’s firm, said creating a financial plan was a relief. She’s the founder and CEO of The Robert H. Levine Foundation, created in honor of her husband, who struggled for 12 years with Lewy body dementia.
While it was challenging to face financial hurdles such as mounting credit card debt or financial losses, “the fact that we had pulled ourselves together made all the difference in the world,” she said.
Time-tested strategies such as switching to cash and putting it in envelopes labeled with each expense, may be getting more difficult in today’s cashless environment, but it works, Levine said.
Financial planners focus on providing guidance, but they’re far from the only resource available to help consumers.
Public libraries often feature programs on topics such as creating a budget, saving for college or buying a home for the first time, usually with opportunities to ask questions. The Chicago Public Library, for example, has a 10-week Money Management Workshop at the King branch, in cooperation with Access Living Chicago, an advocacy center for people with disabilities.
Tina L. Carter, King branch manager, said the money workshop aligns perfectly with the library’s mission to provide lifelong learning to Chicagoans and its goal to become more equitable and resourceful for all. While the program was initiated by Access Living, any resident is welcome to participate.
Financial websites also offer plenty of tools to get started or help you reassess existing spending and investment positions. Some are the work of well-known finance experts such as Dave Ramsey or Suze Orman, and the sites sell books, planning toolkits or courses alongside free products like budgeting apps or calculators for retirement, insurance or paying down credit card debt.
A new free resource is the Illinois Financial Wellness Hub, launched last year by State Treasurer Michael Frerichs in partnership with the University of Illinois Chicago’s Center for Economic Freedom. The platform allows consumers to perform a financial checkup and receive personalized recommendations. New content is uploaded every month, including webinars hosted by Frerichs.
Besides paying down debt or saving for retirement, simply spending less is a common resolution for many. Local retailers, including Jewel and Mariano’s, offer loyalty memberships that not only rack up reward points or bonuses but unlock discounts or personalized deals based on your spending.
And if the recent cold snap brought up concerns about heating bills, Peoples Gas and ComEd have energy efficiency programs that will provide an energy use assessment and tips to lower monthly costs.
Gjersten reminds consumers that budgeting and spending are subjective. Depending on the life stage, career and family, one person’s goal might be completely different than another’s.
“I like the word independence — financial independence,” he said. “And if that’s the goal, how do I get there?”
