Setting Financial New Years Resolutions
HAPPY NEW YEAR!
OK, I’m a bit late, but this is our first column of the 2011. I’m excited to be back and happy that many of you have continued to follow me and these articles. I appreciate the positive feedback, as well as the questions and comments. PLEASE keep them coming. These articles are supposed to inform and educate, so I am open ears if you have questions or have topics of interest that you would like me to write about.
Now, with all that said, let’s get down to business. I’m willing to guess many of you, like most, set a New Years resolution(s) for yourself. Better savings habits, losing weight, developing healthier life style, and quitting smoking are the most common. Do any of these apply to you? — You don’t have to answer that (don’t worry, I know the truth).
What’s interesting is that for the millions of Americans who set these New Years “resolutions,” studies have shown that only 40% stick to them. That’s it. What’s also interesting is that the primary reasons most people do not stick with the goal they set out to achieve is two things: habits & connectivity.
First, recognize that you are a creature of habit. All human beings are. Whether good or bad, habits are very hard to break. Second, with regard to connectivity, it’s great to set these lofty goals, but far too often, when you fall behind, or when it doesn’t seem attainable, you stop trying. Most do it. It’s what separates the good from the great.
Its all about strong habits & personal connectivity.
So, how is it that so few succeed while most fail at stick with their resolution? Below, I will offer a few tips that will help you meet your financial New Years resolutions, and your goals in general:
1. Before saying what you will do, know what you did and why you did it
They say that insanity is defined as doing the same thing over and over, but expecting a different result. When you’re setting a new goal for yourself, too often we get gung-ho about tackling it without adequately reflecting upon the actions which prevented you from doing it in the first place.
Think about last year. On an A-F scale, grade yourself on your personal saving habits and cash-flow management. BE HONEST. If your grade is anything less than an A make a list of the top 5 things you think you can improve on that will help get you to an A. Next, as you begin to write out your goals, incorporate your list as initiatives that will help you work towards your new goal.
2. Big picture, little picture
Setting the bar high is good. However, tasks may often seem lofty and unreachable if they are not broken down into smaller, more manageable ones. If you’re setting a specific financial goal for the year, take time to break it down and identify what you need to do on a month-to-month, week-to-week, or in some instances, a daily basis.
3. Record success and failures, then make adjustments
It’s important to monitor your progress along the way. When you set “little picture” goals, realize that sometimes you may not meet them. That’s OK. You will have successes. You will have failures. Use failure as a learning experience and an opportunity to see where you can improve. Just like in step one, note where you can improve, and recognize it going forward with adjustments.
4. Stick with it & keep the end in mind!
Nothing worthwhile ever comes easy. Like I said previously, you may slip up every now and again. You may not feel like you’re going to meet your goal. You may not even meet your goal when it boils down to it. And if that happens, focus on the positives:
1. You tried your best
2. In the process, I bet you eliminated some of those bad habits on your list and have developed stronger habits you’re not likely to lose.
As a whole, the purpose of goal setting is to reach a better place. It’s intended to provide us with a sense of direction and purpose. We set financial goals for ourselves which vary greatly between every individual — but generally it’s something we should be doing in our personal, professional, and financial lives.
Try making it your goal to make every year better the last. If you have marked improvement year after year, you’re headed in the right direction. Now just figure out what it will take for you to make that happen.