January is traditionally known as the time for new beginnings. We rarely talk about February for what it is—the beginning of the end of new beginnings. As the new year unfolds, it becomes easy to slip back into old habits. This is especially true for financial resolutions. If you have big plans for your finances this year, here is the one suggestion I have for you; start small.
We are a microwave society. Why buy the ingredients and wait two hours for your meatloaf when you can stop off in the freezer section and nuke a complete meal in a minute and thirty seconds? This mentality has slipped into the psyche of nearly every American. You can have a meatloaf in less than two minutes, but you can’t have a fresh, nutritious meatloaf in less than two minutes. In meal planning, like finances, you have to ask yourself what you are sacrificing for instant gratification. If you want to create a financial resolution that sticks this year, take these four ideas into account.
Start Small
If you have resolved to right your financial ship this year, internalize this truth: momentum builds on itself. The best way to realize this is to start small with achievable goals. If you are starting with nothing in your savings account, don’t set a goal to save $1,000. Instead, set a goal to save $100. Then build on the excitement of that first small success. The simplest way to create a habit is through repetition. So set your larger financial goal and determine a way to break it into smaller, easily achievable milestones. Run the 5k before you tackle the marathon.
Begin With The End In Mind
Your financial resolution should be something that motivates you. It should represent moving away from stress and towards success.Take an honest assessment of where you are currently at. Are you realistically on a path to meet your financial goals? There are a lot of intricacies that can go into a financial plan, but to simplify it assess your discipline in these areas; saving, paying debt, budgeting, and investing. Create a vision of the ideal retirement for yourself, then be realistic. Are you doing the little things right to make the big things possible?
Be Accountable
If you are committing to improving your finances, make sure somebody knows about it. Accountability is one of the most important factors in success during any journey. If your spouse or a friend knows that you are trying to improve, they are more likely to be an asset in your success than a distraction. A trusted financial advisor can be a great help in your financial success, no matter where you are at in the journey. Look at your answer to number one, then look at what you want from number two. A good financial advisor can be the bridge between where you are at and where you want to be.
Assign Money A Purpose
Do your financial goals excite you? Then write them down. Writing down a goal is like creating a contract with yourself. When you give money a purpose today, it becomes your legacy tomorrow. The best and easiest way to win with money is to redefine its role in your life. If the goal at the other end of your financial plan makes you happy, then you are on the right path.
Remember, your goals may change and that’s ok. There will be setbacks but some progress will always be better than stagnation. Be honest with yourself about where you are and where you realistically want to be, then start working towards the discipline necessary to get there. What is the smallest change you can make today that will have the greatest impact on your financial journey tomorrow?
Chris Perry, Wealth Advisor