How To Keep Your New Year Resolution Goals Around MoneySubmitted by WWA Planning & Investments on February 7th, 2017
During February most of us begin to slip on our New Year Resolutions. The promise of what could be is now never going to be unless we find a way to recommit.
According to StatisticBrain.com 41% of Americans usually make New Year’s resolutions. The top three 2017 resolutions are:
- 21.4% lose weight/eat healthier.
- 12.3% life/self-improvement.
- 8.5% make better financial decisions
In fact, out of 1,129 respondents with multiple resolutions 32.4% set weight related resolutions and 42.1% set money related resolutions. Why? Health and wealth are actually related. For more on how they’re related, check out my blog On Health and Wealth.
So how do you KEEP your New Year resolution goals around money?
Set SMART goals
Setting goals is easy. It’s easy to say, I want to eat healthy, exercise, and get out of debt. But actually achieving your resolutions takes effort. According to Mindtools.com resolution goals should be SMART.
- Time Bound
In other words, you need to be specific about your goals, know when you’ve achieved them (measurable), and be able to attain them by a certain date. They should also be relevant so you are motivated to do them.
Here’s an example of a retirement goal Jack recently shared with me.
Jack – I am ready to retire. Over the last few years I’ve seen a few colleagues retire and I have been thinking about it a lot lately. My wife was recently diagnosed with breast cancer and it occurred to me that you never know how long you have. I don’t want to spend the rest of my life working if I can retire and spend it with her. I’d like to know if I can retire this year.
We’ve always wanted to buy a trailer and travel the US. I want to visit the Grand Canyon and Rocky Mountains. We make about $250,000 a year, have saved up $2 million, and have no debt. Can I retire?
So what we have here is a goal of retiring. But Jack needs to know if he can. He does have some components of a SMART goal:
- Specific – Retire in 2017 (He might specify how much income he needs to retire on.)
- Measurable – Retiring this year on a specific income would be measurable.
- Attainable – Attainable depending on financial analysis
- Relevant – VERY relevant given his wife’s health concerns.
- Time Bound – Time bound to this year or as soon as possible.
Another good way to accomplish your goals is to write them down and place it somewhere that will remind you daily. For me, I have a piece of paper on a wall that says “#250k Transformation” for a body transformation contest I’ve entered at Bodybuilding.com. In this case, Jack might write the following:
I want to retire in June of 2017 on $100,000 after tax income. I want to buy a $80,000 travel trailer, and I want to spend the summer visiting the Rocky Mountains and the fall visiting the Grand Canyon.
He would write these goals down on a piece of paper or put them in is smart phone and read them daily to remind himself. If he wants to take it to the next level, he’ll write them down in present tense, be more specific, and imagine experiencing his goals as he reads them. Eintein said "Imagination is more important than knowledge. For knowledge is limited, etc.” In this case, Jack might imagine:
On June 6th of 2017, I am retired and living on $100,000 after tax income. June 20th, I am beaming with joy as I drive off the lot hauling a the Land Yacht Series Airstream travel trailer and July 4th I can feel the heat as I watch fireworks at Mount Rushmore. August 1st I am thrilled hiking the Rocky Mountain National Park, and September 1st as things cool down, I take a mule down into the Grand Canyon National park to ride the rapids.
Once you’ve gone into detail about your goals, it’s easier to imagine them happening. You can feel yourself at these parks as you research them online and talk to friends about going. This is a specific and measurable goal. Whether it’s attainable will depend entirely on your financial plan. Any qualified NAPFA Registered Financial Advisor can help you with crunching the numbers. It’s obviously relevant because of current health conditions. It’s also time bound because your goal is set for a series of events in June, July, August, and September.
Once your goals are written down, it’s time to look at the steps necessary to achieve them. In the case above, the steps might be:
- Find an advisors to analyze my situation to see if I can retire on $100,000 after tax income and buy an Airstream for $80,000
- Research Airstreams
- Book National Parks A, B, and C
- Research blogs on living out of a travel trailer
- Join online forums to get tips from those that have done it
- Talk to friends that are retired and traveling
- Get Estate Planning documents in order before trip
- Have finances organized before leaving
Of course the last two I added in there because I’m a financial planner, but you get the point.
In summary, most people set New Years Resolution goals around health and wealth. 42% of all resolutions fail. If you want to make your resolutions stick, use the SMART technique. Make your resolutions Specific, Measurable, Attainable, Relevant, and Time Bound. Write them out in the present tense and put together a series of steps you need to do to achieve them.
Article by NAPFA Registered Financial Advisor Rich Feight, CFP®