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Budgeting

How’s That New Year’s Resolution Going?

Has your New Year’s Resolution bit the dust yet?  Mid-February is right about the time I can find a space in the gym parking lot again. 

Despite noodling over various good ideas, I struggled this year to come up with a New Year’s Resolution.   In fact, January 1 has come and gone and I’m still weighing the viability of losing weight, being nicer, learning something new or replacing my husband in the kitchen once a week.  I’ve tried each of these before, by the way, and can’t say any of them resulted in permanent change.

Many financial resolutions tend to end up with the same results.  We promise ourselves we will save more, spend less, create a budget, learn how to invest.  And yes, we do it for a while – but gradually, old habits emerge and the budget gets relegated to the back of the filing cabinet.

I believe, based on nothing more than my own trial and error, that there are two distinct things you can do to make your resolutions stick around longer.

  1. Make a resolution that you can accomplish in a short period of time and be DONE.

Take an Indian cooking class.  You might never make the dishes at home, but you’ll have learned something new. 

The best financial resolution I heard this year was not “I want to save more” – it was “I’m going to get a professional financial plan”.  A couple of meetings and a few dollars later and this couple had a financial plan-signed, sealed and delivered.  They had learned more about their situation in a couple of weeks than they had known the last fifteen years together.  They talked about hopes and dreams for the future; together they made choices about where to spend their money; and they now had a blueprint to follow for not just one year, but the next several. 

But wait, you are saying – what guarantee is there that they actually implement the suggestions in the plan?  And you are right- it might also be relegated to the filing cabinet.  But if they spend the next 30 days getting as much “stuff” set up & checked off the action matrix they received as part of their plan, they won’t really have to do much the rest of the year. 

Just going through the planning process itself identifies the “Why am I doing this? What’s my end goal?” part of resolution setting- something we often forget when we vow to go to the gym three times a week.

  1. Make a multi-year resolution and break it down into smaller pieces.

When you ask someone about this year’s resolution, they usually reply with something they hope to accomplish within the next twelve months, right?  I was so proud of myself when one year, at a New Year’s Eve dinner (in Times Square, no less) I proudly announced my New Year’s Resolution was to get pregnant and have a baby – and I actually did just that.  The baby was great; I felt great about actually accomplishing what I set out to do, but guess what – thirteen years later she’s still around needing some care and attention!  (Had I known I was making a multi-year resolution that evening, I might have given it a little more thought…)

But really so many of our resolutions are multi-year tasks, even if we don’t acknowledge it.  And when it comes to your financial situation, there’s no doubt.  That resolution to get a plan in place is really just step one of a life-long process.  But what that example above tells us is that you need to start with the end in mind – whether it’s retirement, paying for college or leaving money to your kids.   Once you know where you’d like to end up, it’s so much easier to figure out how to get there.  

That doesn’t mean you have to wait until your eulogy to celebrate the success of your resolution.  By breaking it down into smaller pieces that lead in lock-step to the greater whole you can celebrate a little as you go along, right? 

Start with identifying your specific goals and then quantify them.  How much are you going to need in the future?  How much do you need to save now to get there?  What documents or insurance coverage do you need to put into place to protect those accomplishments? Once you know that, you can set very specific tasks that can be accomplished in the next week or month – setting you up for continual success.

Of course, you can apply this multi-year resolution idea to any of your non-financial wishes as well.  After all, losing weight is a meal by meal process coupled with a daily exercise routine. 

So, what’s my New Year’s Resolution?  It’s a multi-year goal broken into smaller accomplishments:

To read the 94 Heritage Club Classics  I inherited from my father six years ago.  They sat on his bookshelf my whole life and now they are sitting on mine.  By doing this I hope to accomplish the third type of New Year’s Resolution everyone should have once in a while:

3. DO SOMETHING JUST FOR FUN.

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