Did you know that the failure rate for New Year’s resolutions is about 80% and most lose their resolve by mid-February?
Did you make a New Year’s resolution? How’s it going so far?
To know me is to know that I am not a Debbie Downer. However, I have to admit, I do NOT believe in New Year’s resolutions. In fact, I equate New Year’s resolutions to making a birthday wish. You can’t just close your eyes, blow out some candles and will something to happen.
Instead, I propose that you set goals for 2021. Set big ones and small ones. Expect there to be triumphs and setbacks. Acknowledge there will be temptations, obstacles and excuses. To focus your efforts and increase the chances of achieving your goals, create a plan!
I know … shocking words coming from a financial advisor who believes the cornerstone to financial success is financial planning. But let’s be honest, the amount of time we spend worrying decreases when we have a written plan with specific action items. I know many of my clients reading this can attest!
For me, goal setting is a process. I start by reflecting on the past year and setting my intentions. It gives me a chance to answer a few vital questions:
- How was this past year? What did I learn? How did I grow? Have my priorities changed?
- Did I hit my goals? If not, why? What goals do I have for the year ahead?
- What can I do better this year?
If you need some inspiration, consider utilizing this template. Completing this exercise allows me to identify what is important to me. The next step is to set my goals based on my expressed intentions. To help organize my thoughts, I utilize the SMART framework. SMART is an acronym that you can use to guide your goal setting. To make sure your goals are clear and reachable, each one should be:
Improved finances comes second only to goals around diet and exercise when it comes to New Year’s resolutions. Unfortunately, most don’t know how to start mapping out a financial future. There is certainly no shortage of information available to the consumer. However, the greatest obstacle that I have observed is being able to decipher this information to determine what is relevant to one’s financial situation and what action steps should be taken.
Whether you are an existing client or a visitor to my blog, I invite you to consider this list of potential do’s and don’ts for 2021:
- Invest in yourself
- Spend money in ways that make you happy
- Choose experiences over stuff
- Automate every part of your financial life
- Teach someone else about the power of saving and investing
- Learn to appreciate what you already have
- Save at least 1% more than you did last year
- Declutter: Get rid of everything you don’t use or love
- Make a (realistic) budget
- Track your net worth
- Make one extra mortgage payment
- Create a “vision board” with your three top financial goals
- Reward yourself
As we have learned or been reminded of in 2020, as much as you plan, life happens, and some things are just out of our control. So focus on what you can control and do your best. Make sure to check in with yourself to track how you are progressing with your goals and determine if you need to make any adjustments. Consider enlisting the help of a friend, family member or co-worker to hold you accountable. I would submit that is part of the value of working with a trusted financial advisor. Well, accountability and all my to-do lists and action items emails.
This is the exact reason why I have built a client service model centered on semi-annual meetings. The market, the economy and your personal situation will change. It is much easier to monitor and make adjustments every few months than to re-create a financial plan every few years. I believe it is a direct contributor to ensuring your financial success.
I hope these recommendations help you start your new year on the right foot. If you want to set up a time to discuss your goals, don’t hesitate to call or email me. You can also schedule a phone call or Zoom meeting by clicking here.
Looking forward to a successful 2021!