Americans’ top five financial resolutions and how people can make them stick

Every year, you make a promise to yourself to get out of debt or finally build a decent emergency fund.

Or maybe you've resolved to spend less or save more for retirement. You set a goal.

Then life gets in the way, and your financial resolution is derailed. You feel like a failure, so you stop even trying. And it's only March.

The problem isn't that you didn't have enough willpower. You probably didn't have a plan, which starts with knowing where you stand.

According to Bankrate, the top 2022 financial goals for U.S. adults are paying down debt, building an emergency fund, budgeting better, boosting retirement savings and investing more money. Here's advice on how to stick to your goals:

Where should I start in creating a plan to pay down my debt?

Say your debt amount aloud. One of the first things I do when helping folks struggling with this resolution is to get them to say out loud how much debt they think they have. Nearly everyone balks at this request, because they don't know the total or they are embarrassed. It's not enough to write it down. Saying the number out loud does something to folks. It leaves an impression of the urgency to pay down the debt.

Next, make sure you are certain of everything you owe. Pull your credit reports from all three credit bureaus – Equifax, Experian and Transunion. The bureaus have set up a centralized website at annualcreditreport.com so you can order your free annual reports in one place. You can also call 877-3228228.

Federal law gives you the right to a free copy of your credit report every 12 months. Because of the pandemic, the bureaus are allowing everyone in the United States to get a free credit report each week through April 20.

Finally, the method I've found most effective in tackling debt is to list what you owe, starting with the smallest balance. I call this strategy the “debt dash.” In addition to your regular payment, take any extra funds and apply them to the principal of the smallest debt. Once you've knocked off the top debt, take all that money and move on to the next one on your list, and so on.

What’s the best way to save for a financial emergency?

When trying to build an emergency fund, it's best to set it and forget it.

Set it up so that there's a direct deposit from your paycheck to a bank account for your emergency funds. I suggest it be a different financial institution from the one where you keep the account to pay your bills. The separation usually results in less temptation to transfer funds into the household account to make up for overspending.

How do I stick to a spending plan?

In response to a column about budgeting, a reader once wrote, “My financial motto has always been: I save where I can so I can spend where I want.”

I'm all about telling yourself the truth. Budgeting better or controlling your spending starts with really being honest with yourself. No, sales don't save you money, because you're still spending.

Just to get an idea of how much you spend, track your spending for a month. Get a little notebook and capture all the money going out – yes, even where you spent that $20 you took out of the ATM. Where you see waste, redirect that money to other goals, such as building your emergency fund or paying off debt.

How can I save more for retirement?

Again, here's where automation can work in your favor. The first of the year is a good time to look at your retirement savings percentage. What percentage of your income did you allocate to invest for retirement in your 401 (k) or similar workplace plan?

Even if you don't have a 401(k), you can set up a traditional individual retirement account, which allows you to invest pretax income toward investments that grow tax-deferred. You can also set up a Roth IRA. You fund it with after-tax money, but your withdrawals are tax-free.

I have extra money. Should I invest it?

With banks paying a pitiful amount of interest on savings accounts, you may be wondering how to grow your non-emergency-fund money. Outside a retirement account, you have many choices to invest.

I suggest you go through the free “Smart Investing Courses” offered by the Financial Industry Regulatory Authority (Finra).

Contact Michelle Singletary at michelle.singletary@washpost.com. Follow her on Twitter: @Singletarym.