After the ball drops on New Year’s Eve, we focus on our hopes and dreams and make some resolutions. Getting back in the gym, losing weight, and eating well, 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), use these tips to actually achieve your goals.
Turn Dreams into Goals Dreams are something that the heart wants and the mind can envision. It can be opening your own business, retiring early, taking a trip around the world, or even just being able to pay for part of your kids’ college tuition. The hard part is taking those big ideas and transforming them into reality. Financial goals operate like any other goal. They benefit greatly from being written and planned using SMART: specific, measurable, attainable, realistic, and time-based.
The purpose of SMART goals is to make you think about your goals and clearly define 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 your goal(s).
Google It Do you want to make a financial goal but aren’t quite sure where to start? Surf the internet to get some good ideas and then adapt them to your personal situation. Google “financial resolutions” or “ideas for financial goals” to get ideas.
Baby Steps If you’re saving for something big like a down payment on a house or paying off a large debt on your credit card, it can be daunting! But, if you take a baby step such as saving $125 a week that you will then put toward the payment or bill, it becomes much more manageable. After even six months that weekly savings will add up to a significant amount. Develop a plan that will help you save that $125 a week by cutting down on extraneous expenses (coffee shop lattes, shoe shopping, sports tickets) more often than you have in the past.
Get a Personal Trainer for your Money When we make exercise and weight loss goals, one of the first things to do is invest in a personal trainer—someone to hold you accountable. Consider a financial advisor as your guru to get your portfolio in shape. If you already have such an advisor, get in regular contact with them. Set up an appointment to clue your advisor in on your annual resolutions and set a plan to reach your goals together. If you don’t already have a financial advisor, that should be your first step. Not sure where to find a financial advisor? Ask your close friends, family, and colleagues whom they trust with their money.
Regular Review The New Year’s celebrations only come around once a year, but that doesn’t mean you have to wait until December to refocus and reevaluate. Set a calendar reminder to regularly review your financial goals (whether that’s once a week, month, or quarter). During these review sessions (that should include your financial advisor) be thorough and honest with your progress and setbacks.
Slip-Ups Will Happen You’re not a perfect person and it’s wrong to assume that just because you’ve set a financial goal, the journey will be without a few pitfalls. Maintaining discipline and focus is not easy. Failure is likely to happen. If your goal is to pay off all credit card debt over the next 10 months, but you end up spending extra cash on a spontaneous trip, don’t beat yourself up. Ignore it and keep on going!
Embrace Tech Your smartphone 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. For a low monthly fee or even free use, you can have a personal budget tracker and analyst in your pocket that can assist in budgeting and investing on a daily basis. Turn the notifications on and you’ll quickly notice that financial budgeting and savings apps are a simple way to keep your goals in mind well after the New Year has passed!
Resources
http://www.wsj.com/articles/how-to-set-and-keep-your-personal-finance-resolutions-1483185601
https://www.projectsmart.co.uk/smart-goals.php
http://www.cheatsheet.com/money-career/tips-setting-keeping-financial-goals.html/?a=viewallhttp://www.bankrate.com/finance/savings/refocusing-on-financial-goals.aspx
*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 2014-2017 Advisor Websites.