Financial Resolutions: 6 Tips to keep you Accountable
The beginning of the New Year often stirs up hopes and dreams and we often make some resolutions. Getting back in the gym, losing weight, and eating clean, are usually at the top of the list, but what about your finances? The health of your accounts, spending habits, and investments are just as important to evaluate. When it comes to your financial resolutions this year (and beyond) here are some tips to actually keep and reach your goals.
Turn Dreams into Goals
Dreams are something the heart wants and the mind can envision. Whether that’s opening your own business, retiring early, taking a trip around the world, or even just being able to pay for part of your kids’ college tuition. The hard part is taking those big ideas and transforming them into actionable goals. Financial goals operate like any other goal in the way that they benefit greatly from being written and planned at SMART: specific, measurable, attainable or agreed-upon, realistic, and time-based.
Taking a big dream and breaking it down into something that features clear-cut amounts and is tied to a certain time can be difficult, but that’s the purpose of SMART goals—to make you think with intention about your goals before agreeing to them. Take a blank piece of paper and write out a few versions of the same goal, and then talk it over with trusted confidants or other stakeholders (such as a spouse or business partner) before solidifying the goal(s) you’re going to stick to.
Want to make a financial goal but aren’t quite sure where even to start? Surf the internet to get some crowd sourced ideas and then adapt them to your personal situation. Google “financial resolutions” or “ideas for financial goals” to get your brainstorm going. You may also look to your social media network, asking for examples of personal finance intentions.
If you’re saving for something big like a down payment on a house or want to completely pay off a maxed out credit card, those are huge numbers at face value. But, if you set a miniature step such as saving $125 a week that you will then put toward the payment or bill it becomes more manageable. After even six months that weekly savings will have added up to a significant number that will cut away at the greater goal. Set a plan of how you can save that $125 a week by reasonable cutting down on extraneous expenses (coffee shop lattes, shoe shopping, sports tickets) more often than you have in the past.
Get a Personal Trainer for your Money
When we make exercise and weight loss goals, one of the first things you should do is invest in a personal trainer—someone to hold you accountable for your goals. Your financial advisor can be your “trainer” to get your portfolio in shape. Set up an appointment to discuss your resolutions and set a plan to reach your goals together. If you don’t already have a financial advisor, that’s your first step.
The New Year’s celebrations only come around once a year, but that doesn’t mean you have to wait another year to refocus and reevaluate. Set a calendar reminder to regularly review your financial goals in increments that make sense for your monetary goals (whether that’s once a week, month, or quarter). During these review sessions (that should sometimes include your financial advisor) be thorough and honest with your progress and setbacks.
Slip-Ups Will Happen
It’s wrong to assume that just because you’ve set a financial goal the journey to that goal will be without a few pitfalls. If saving, investing, and reaching financial goals were easy you likely would have already done so. Say your goal is pay off all credit card debt over the next 10 months, but you end up spending extra cash flow on a spontaneous trip. It’s okay, but don’t beat yourself after the fact or think that because of one diversion your whole goal is over and done. Refocus and start again.
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2022 Advisor Websites.