A New Year, A Better Way to Approach Resolutions
It’s that time of year again when we come up with the well intentioned, but often overly ambitious New Year’s resolutions. Unfortunately, failure to accomplish or stick to these resolutions often results in a sense of guilt. There’s got to be a better way to achieve your goals, right? Well, read on for the approach I use to achieve my goals.
Recently, a story about financial resolutions in the Wall Street Journal featured a poll showing readers’ top financial resolutions. Without further ado, here they are:
· Pay off debt – 29%
· Save more money – 27%
· Spend less money – 24%
· Adopt a budget – 10%
· Get a will/estate plan – 7%
· Develop a retirement plan – 2%
· Other – 1%
These are all indeed excellent goals, but I’d like to suggest that simply stating a goal isn’t enough. To ensure success I suggest quantifying and/or breaking up your goal(s) into smaller bits. Here are some examples:
· Let’s say you have $10,000 in credit card debt or a student loan. You should attempt to quantify how much you want to pay off and over what time period. Perhaps your cash flow permits you pay off $5,000 (50% of the total amount) over the next twelve months. Breaking $5,000 into twelve monthly installments of roughly $416 might help you stick to the repayment plan.
· It’s more difficult to quantify your goal of drafting a will or an estate plan. However, you can still help yourself by breaking up the main tasks into smaller tasks. In this case, your first week’s task could be to solicit recommendations for an estate attorney or an online service that provides wills. The second week’s task might be to contact the providers. The final tasks include having the forms generated, signed, and witnessed.
I consider this a simple, common sense approach to dealing with your resolutions. But they work! Bonus: They work for pretty much all of your goals, not just your financial ones. This approach has helped me get through many triathlons over the past ten years.
Please contact me if you have questions, comments, or suggestions for upcoming articles. I plan to use next month’s post to cover the exciting world of flood insurance.
Chuck Donalies, CFP®
Donalies Financial Planning, LLC
www.donaliesfp.com - Currently under construction!
Follow me on Twitter @frugalplanner
Chuck has lived in Bloomingdale for over 8 years. He’s a CERTFIED FINANCIAL PLANNER™ Professional, father of two, husband, artist, and triathlete