Financial Resolutions: 7 Tips to Keep You Accountable
As we begin the new year, we dig up our hopes and dreams and make some resolutions. Health-related goals 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 help you stay on track to reach your goals.
Turn Your Dreams into Goals
To quote Antoine de Saint-Exupéry: “A goal without a plan is just a wish.” Whether you’re opening your own business, taking a trip around the world, or even just aiming to pay for part of your kids’ college tuition, the hard part is taking those big ideas and turning them into something actionable. Financial goals operate like any other goal in that they greatly benefit from being well-defined, written, and planned. SMART goals are a common way to organize your ideas. This system asks you to create goals that are:
Attainable or agreed-upon
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 to start? Surf the internet to get some crowd-sourced inspiration and then adapt them to your personal situation. Search “financial resolutions” or “ideas for financial goals” to get your brainstorm going. You can also look to your social media networks, asking your digital community examples of their personal finance intentions.
A down payment on a house, student loans, and credit card debt can be huge numbers at face value. But if you break down these numbers into smaller portions, paying for these items can feel more manageable. Start by saving an easily manageable amount each week. Even after a few months, the savings will add up to a number that can cut away at the greater goal. Set a plan of how you can save by reasonably cutting down on extraneous expenses or look at ways to increase your income.
Get a Personal Trainer for your Finances
Many people work with a personal trainer when they’re trying to reach a fitness goal. Trainers will provide support and help hold you accountable for your goals. Think of a financial professional as a trainer to help get your portfolio in shape. If you already have a trusted financial professional, set up an appointment to discuss your annual resolutions. They can help you create a plan so you can work towards your goals.
Don’t have a financial professional in your contacts yet? Not sure where to even find a financial professional? Ask your family, friends, and colleagues who they trust with their money.
Schedule Regular Reviews
New Year’s celebrations only happen once a year, but that doesn’t mean you have to wait until the end of December to review and reevaluate. Set calendar reminders to review your financial goals. Create a schedule that makes sense for your monetary goals; whether it’s once a week, monthly, or quarterly. During these review sessions (that should sometimes include your financial professional) be thorough and honest with your progress and setbacks.
Accept that Slip-Ups Can Happen
Even well-constructed goals have setbacks. You’re not a perfect person, and it’s not fair to hold yourself to unrealistic standards. If saving, investing, and reaching financial goals were easy, you likely would have already done so! Failure can happen, and if it does, that’s okay. Don’t beat yourself up and assume that your goals are unattainable because of a setback. Instead, find ways to motivate yourself and make the journey to your goals easier.
As an example, let’s say you want to pay off your student loans at a better rate than in previous years. You may want to try setting up automatic payments, and then tell yourself you’ll treat yourself to dinner at your favorite restaurant once you hit a certain milestone. Building a reward system may make the journey more enjoyable.
Your smartphone, tablet, and laptop are always nearby, so use them! There’s a wealth of financial apps out there to help you set and track your financial progress toward goals. For a low monthly fee or even free, you can have a personal budget tracker in your pocket that assists you on a daily basis. Turn on notifications to be reminded of your goals and current progress throughout the day. It can help keep your goals top of mind well after the initial new year motivation has passed.
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 2023 Advisor Websites.