Broke Next Year? Not if you stick to your New Year’s Resolution!
January 3rd. Just a few days past the revelry of New Year’s Eve, when there was so much hope for a new start, a new beginning, a change of ways. For most of us the holidays are becoming a distant memory- the decorations that are still up feeling more like a nagging chore waiting to be cleaned up than an expression of joy.
The list of resolutions that were enthusiastically committed to:
I Will Exercise Every Day!
No more Carbs For Me!
I Will Save More!
are probably still being adhered to, but there are cracks in the resolve.
Will this year be different? How can we make the changes we want- and make them stick? Here are my thoughts on this:
1) I made a deal with myself to limit my resolutions this year to 3. A list any longer than that becomes intractable. I did make a separate list of “goals” — but I am drawing the distinction. Resolutions are the life changes I need to make to live the life I want. Mine are:
a. Work out at least 30 minutes per day, at least 6 days a week. This doesn’t need to cost anything and I am not joining a fancy gym. A pair of running shoes and the exercise videos I like on YouTube are enough.
b. Spend 15 minutes every day organizing and otherwise throwing stuff away. An amazing amount can get done in 15 minutes a day-and it is so great to be surrounded by order everywhere you look.
c. Make all decisions by evaluating through both an intellectual and spiritual lens. Not as specific as I would like- but a really important reminder to me. (See SMART goals below — this isn’t necessarily one that fits but I am working on it!)
2) Make the resolutions SMART — specific, measurable, achievable, results-focused and time-bound. This is the difference between saying “I am going to get in shape” versus “I am going to do at least 30 minutes of aerobic workout 4 days a week, and the other 2–3 days I can do yoga or lift weights for at least 30 minutes”. Making it really clear makes it harder to kid yourself about whether you are doing it or not. I would also add that being clear about the “Why” of the resolution- why is this so important to you- is critical.
3) Write them down. I am a list person by nature, but there is something about writing out resolutions (and goals, and “to do’s”, and grocery lists — pretty much everything!) that makes the promise you are making to yourself more concrete. Also for me, when I see things in black and white I can better critically assess whether this is really something that matters to me.
4) Give any impacted people a heads up. In my case, the only impact on my family is minor as it relates to the time away to exercise- but still letting them know why this is important to me (more energy, better long-term health) gives them the chance to be supportive.
5) Make regular appointments with yourself to check on progress. I like to do this on Sunday afternoons. That is when I am preparing for the week ahead so it is natural to make sure that anything I need to schedule (like a workout!) is on the agenda. It is also, for me, a good time to reflect on what went well in the previous week and what I would like to improve for the week ahead.
Even for people who don’t make New Year’s resolutions, we all have something we are trying to achieve. According to YouGov, the top 3 resolutions that people made this year were to eat better, exercise more, and spend less money. For many people, financial goals- whether New Year’s resolutions or not, are at the top of the list of things that are trying to achieve.
What we found at Pefin is that most people become very engaged with trying to plan their personal finances when they have a life event that really matters to them. Whether that is wanting to start a family, buy a home, send kids to college, plan for retirement, or attain some other major goal. Very much like New Year’s resolutions, achieving financial goals require being clear on what you are trying to achieve, having a SMART plan for getting there, sharing the goals with impacted people in your life, and checking in to make sure you are on track.
The challenge with financial goals- as with other goals- is how to break the patterns of behavior that perhaps don’t serve you well, and how to create new patterns. It is also really important to understand how changes that you make impact that desired outcome. For instance, if the goal is to have a comfortable retirement, how do you know how much you will need, and what are the options at your disposal to achieve that? Most people don’t have the time or the resources to build complex financial models to analyze their financial situation, and that makes it hard to run the scenario analysis that can help to make the right decisions. Getting the right resources to help with the decision process is critical.
Just as it is frustrating to go to the gym and not see any results, or restrict calories and not lose weight, if you are cutting back on your morning coffee in hopes that the money saved will enable you to sock away enough for your down payment on a house- and it doesn’t- you end up making your life worse rather than better. Investing time in a workout plan designed for you, or a healthy diet that will get results, is key. Likewise, making sure you know the best way to achieve the financial goals that are important to you is the purpose of financial planning.
It is my hope for you that you achieve your resolutions, and if they are financial in nature that Pefin can help. Ultimately money isn’t the goal, it’s about living the life you want today, and in the future.
Check out Pefin at www.pefin.com. #DoLife with Pefin!