Now's a great time for setting achievable goals

THE New Year heralds the start of what is often a very short lived resolution season.   

Research by comparison site Finder shows two out of five adults welcomed in 2015 with a personal goal.

But if previous years are anything to go by, the vast majority of resolutions will be a distant memory by the time Australia Day rolls around.  

Apparently, the most frequently made New Year resolutions are about health and fitness (58%), followed by financial goals (15%) and pledges regarding personal relationships (8%).  

These are all worthy goals. However one reason why New Year resolutions tend to fizzle fast is because we have a habit of setting unrealistic targets for ourselves.   

To give your 2015 resolutions some staying power, try focusing on the basics. When it comes to your financial wellbeing, small changes in key areas can make a valuable difference.  

As a guide, consider aiming to grow a pool of emergency savings.

Plenty of families lack the backup cash needed to cope with household emergencies, and it's a weak spot that can jeopardise your family's financial security. 

To start a savings action plan, work out how much you can afford to save each pay day.

Make it easy to stick to your goal by setting up a regular automatic transfer from your everyday bank account into a dedicated high interest savings account.

You'll be surprised how quickly the balance of your emergency nest egg can grow.  

Or, think about getting serious with credit card debt. I realise that in many households the mortgage eclipses credit card balances. However, home loan rates are at record lows and your home should grow in value over time.

Card purchases, on the other hand, are likely to be of no lasting value and the lingering debt can come with interest rates of 20% or more.  

If you are reasonably disciplined, a balance transfer deal can offer an opportunity to get ahead with card debt.

According to another comparison site Mozo, there are about 60 credit cards offering 0% balance transfer deals - that's a massive choice.

Narrow down the selection by checking the fine print for balance transfer handling fees.

Mozo says a number of credit cards now levy fees worth around 1% of your debt for processing a balance transfer.  

Bear in mind, debt problems don't just go away when you transfer a balance to a new card. It's critical to use the breathing space of a balance transfer to actively pay off the debt.  

A range of tools are available that can make it easier to stick with your New Year resolutions.

The government's TrackMyGOALS app is free to download from the MoneySmart website.

It can be used to create, prioritise and track your progress with savings targets.  

I hope 2015 is a great year for you and your personal finances.  

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

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