By the end of each year, I notice people almost line up to make resolutions! But the statistics on how many people actually follow through and accomplish their New Year’s resolutions are rather grim. Studies show that less than 25% of people actually stay committed to their resolutions after just 30 days, and only 8% accomplish them. (Dec 31, 2018 https://www.forbes.com › 2018/12/31)
According to Forbus, you’ll find that less than 25% stay committed and worse, only 8% accomplish their resolutions.
I’ve already said this once this year, but it’s worth repeating: Don’t fall into the resolution trap! And don’t be afraid to look at the future with fresh eyes and set solid goals that will take you exactly where you need to go financially.
How do you begin? The best way is to keep a fixed focus on the plan that you have in place. Most everyone today is talking about the economy. What you want to do is set a course that will take you where you need to be and where you can grow even in difficult times. This takes planning and not becoming too comfortable even when the stock market is roaring.
Take time to seriously evaluate what took place in your life financially in 2019.
- Do you feel like you had sufficient gains, or did you end the year with less than you expected?
- Did you spend more than you made?
- Did you make more than you spent?
- Did you have double digit stock market returns with a 2 at the beginning?
- Did you face a serious shift in your life due to illness or a job change?
This is the time when you need to “dial in” the metrics from last year and honestly take a look at what took place. If it is needed, be brave and not afraid to readjust your course. The adage is true: Performance measured is performance improved.
One of the ways you dial in your metrics is to check where you started last January and where you ended in December. Did you reach your goals? This has nothing to do with setting resolutions and everything to do with planning.
So, ask yourself, “When it comes to finances, did I do well? Was my budgeting on target or did I step away from my game play. Did I stay in step with my saving and investing goals and even go beyond them?
One of the things that can happen in a good economy is that people can become too free with finances. Overspending, regardless of your income level, is never wise. Economies go up and they come down. Your goal is to have a plan in place and to stick to it. Ride the waves, enjoy your life, but prepare—always.
Quickly, draw up a T-Chart where you list out your pros and cons from last year. T-Charts are graphic organizers where you list and examine the advantages and disadvantages associated with your finances.
It’s an easy way to create a realistic metric. When you know where you are, what you want to accomplish, where you want to go, and what you need to do to get there, life is clearer and makes more sense.
I believe the difference is “connecting” with your values and writing your “perfect today.” My Perfect Day webinar and 15 minute consult are free. These will give you CLEARER VISION and more buy in as you go through this year.
They will prevent you from chasing the idea of just being a size 4 for the sake of being thinner than the next person! There’s true value in family meals and entertaining friends. For 2020, you may want to set a goal to have more enriching experiences around the dining table. So, be the size 8 instead of seeking to look good in a bikini two times a year!
Begin with these three steps:
Set goals, not resolutions. Keep your goals realistic. A financial adviser will show you how to do this. (I would like to do this for you.) Realistic goals include short-range, mid-range, and long-range goals. You never want to put all your “eggs” in one basket! Short-range goals are ones that you can reach easily. Saving for an important event, purchase, or trip.
Mid-range goals are ones that require a little more time and energy to achieve—saving for that second home or restructuring your finances so you can give more to charitable organizations.
Finally, long-range goals include things like retirement planning and what you want to accomplish with your money later in life. Goal setting from a financial perspective always begins with living within your means and not spending more than you earn.
Create a budget. If you don’t have one, you need one. A budget is a framework to your life. Budgets are very creative, and they reveal a lot about you and how your life is structured. A budget allows you to keep up with life and to deal with things chronologically as they come at you.
A budget helps you figure out your goals and work toward them. It prevents you from drifting through life and tossing money away. It forces you to map out your goals, save money and keep track of your finances. All of this means you will see your dreams become a reality.
Most importantly, a budget will prevent you from spending money you just don’t have. You will know what you earn, what you spend, and how much you need to save.
Finally, life contains many unexpected surprises. People face layoffs, terminal illnesses or injuries. These along with an unexpected death or divorce can leave you broken financially but if you have a budget, a savings plan in place, you can get through the emergencies of life.
Every budget needs to include an emergency fund of three to six months’ worth of living expenses. This extra money is a safety net should the unthinkable happen and a life crisis hit.
A budget will also help you catch more shut-eye. How many nights have you “tossed and turned” worrying about how you were going to pay the bills? People who lose sleep over financial issues are allowing their money to control them. Take back the control. When you budget your money wisely, you’ll never lose sleep over financial issues again.
Of course, this is just the tip of the iceberg. There are countless advantages to following a budget. So, what are you waiting for? Time to start budgeting!
Take a close look at the metrics you are using for your life. Are they the right metrics? Metrics guide your decision-making and fuel your performance. They are a set of agreed upon “success” measurements that track with your spending, savings, and investments, among other things.
Beware of chasing the wrong metrics. I’m preparing to climb Mt. Everest in May. So, my weight, no one believes—my resting heart rate, and my cholesterol and A1C scores don’t lie. Get my drift? Are you chasing a certain look on your p&l? Certain waistline yet those aren’t the things you really really want or value?
Albert Einstein wrote: “Try not to become a man of success, but a man of value. Look around at how people want to get more out of life than they put in. A man of value will give more than he receives. Be creative, but make sure that what you create is not a curse for mankind.”
The right metrics motivate you to do the right things that you otherwise would not do like saving more, spending less, thinking smarter, and bravely tackling life by trying a new adventure. Being financially secure is a great adventure and one that you want to be on.
So, are yours metrics, goals, and budgeting working for you? Will they take you where you want to go financially in 2020? January is almost over, but it’s never too late to begin, so let’s start together. With these stepping stones in place, you don’t need to think about resolutions that are not based on solid evidence and ability.
Instead, take charge of your life in 2020 with your money. What you focus on expands—I repeat, what you focus on expands. Make your plan expand for YOU. Take a moment and set up a free 15 minute consult with me, and let’s make a plan for your future—not just in 2020 but for the rest of your life!