Be among the 8% that stick to their resolutions
Will you make a New Year’s resolution this year? One of the smartest resolutions might be getting your finances in order. But as we all know keeping that promise to ourselves is another matter.
A lot of people make money resolutions. According numerous studies, the most popular resolution every year is to lose weight, followed by getting organized, and saving more money. It’s good to see that a financial-related resolution is in the top three.
Here is framework for making your New Year’s resolution stick.
Past Performance is No Guarantee
Many Americans are still trying get over their fears of the 2008-2009 financial crisis, or the COVID bear market of 2020. Some of us are feeling like we missed the bull market of the past 10+ years, or the market rebound in the second half of 2020, and might want to take on too much risk in an effort to catch-up.
No matter your past investing history, there is always more that we can do to improve the financial picture for ourselves and our families. The key is to make a plan. A goal without a plan - is just a wish!
Sadly, some don’t bother making a New Year’s resolution because it seems futile. Indeed, few of us are able to keep our resolutions each year. Did you know that while the majority of us make resolutions every year, less than 8% actually keep them?
This doesn’t have to be the case. There is every reason to make this year the ONE, and accomplish what you set out to do. Here are some tips to help.
Involve Family and Friends
Get your family involved to help you follow through. You can also share your resolution with others, and have someone help keep you accountable.
If you decide that you want to set a budget and save a specific amount each month, see if a friend wants to do the same. At the end of each month, check in with each other to make sure that you are both on track.
Create A Budget
The centerpiece of a financial resolution is to create a budget for the entire year. This isn’t as daunting as it sounds. Decide with your spouse and family members what the big expenses are for the year. Will you need to buy a new car? Take a vacation? Fix the roof or replace the air conditioner? By planning ahead and setting aside money in advance, these expenses don’t hit your pocketbook as hard as they would if there were no plan. A family budget is a great learning opportunity for kids, as well.
Start Fresh
Don’t allow mistakes that you made in the last 12 months affect your goals for the new year. Allow yourself to mentally wipe the slate clean. Learn from your previous stumbling blocks and strive for your new goals.
Perhaps you had trouble with credit card debt, stress at work, or gained a few extra pounds. Involve those challenges into your New Year’s plan. Setup a timeline for paying off debt, schedule time to de-stress and get away from the office, meet with a personal trainer, or create a fitness plan that will work best for you.
Write it Down
Don’t forget to write down what you want to achieve and place it somewhere where you will see it each day. If nothing reminds you of your goals, then it becomes much more challenging to attain them.
Finally, share your new year’s goals with us to make sure that your resolutions are consistent with your long-term financial plan. We can be a great accountability partner too.
