Meeting Your Financial Resolutions

I just realized that it is almost the end of January. Can you believe it?! Time goes by way too fast. So, with the first month of the year coming to an end very soon, it is a good time to check on the status of those well-intentioned resolutions/goals that you made as you were ringing in the New Year. For me at least, part of being successful with goals requires constant reviewing and reassessing of those goals. Otherwise, it is easy to forget about all those goals as the year goes by with life being so busy. This is true of any goal, whether it is finance-related or not.

Another thing with setting goals for the year is that you think that you have such a long time frame that, sometimes, you don’t feel the need to address all goals right away or there are so many that you get overwhelmed and are enthusiastic for a month or two and push yourself hard and then decide that you cannot sustain the pace and all those good intentions fall to the wayside. For me, goals are always more likely to be reached if you break them up into more manageable steps and set deadlines for each step, including budget goals.

My solution for avoiding being overwhelmed and for getting things done is to look at all my goals for the year, prioritize them from most important to least important and then assign a goal or a couple of goals for each quarter. For example, if my goals for the year are start a blog, run 12 miles a week, do yoga twice a week,  switch to purely organic skincare, volunteer at a children’s hospital or women’s shelter, read a book a month, and take ballroom dancing classes (in that order), trying to implement all these goals all at once would make me go crazy or cause me to be seriously sleep deprived. So, to make more manageable, I would plan to run 12 miles and switch to the organic skincare the first quarter (Jan-Mar), do yoga and volunteer the second quarter (Apr-Jun) once the running schedule is set and has become a routine, start reading a book a month in the third quarter and so on.  I have found that these more specific time frames have helped me to accomplish so much more and have made me more excited to set goals in the following year.

The same thing holds true for all goals, including financial ones, like budgets. In my last post, I talked about how setting really rigid goals that are so different from our current spending patterns can lead to frustration and surrender pretty quickly.  So, setting the more manageable goals, taking baby steps, and constantly reassessing things can really help. For example, if your goal is to pay off your credit card debt, build an emergency fund, and save for retirement, trying to cut your expenses to meet all these goals may be too dramatic of a change. So, first, prioritize your goals with your first priority being to set up an emergency fund, next to pay off your credit card debt, then save for retirement.  So, cutting your expenses to make sure you have enough to cover your expenses, including the minimum credit card payment, and also set aside money for an emergency fund is the first step. If you need an emergency fund of $8, 000 for 4 months and you want to meet the goal by the end of the year, you would have to save about $666 per month to meet this goal. (A word on saving for an emergency fund versus for retirement – while saving for retirement is an important goal, an emergency fund is a more important goal as retirement could be years ir decades off while an emergency can happen tomorrow.  So, work on that emergency fund first and then the retirement fund.) Also, set reassessment dates for you to look back on your goals, every three months or six months. See how you have been doing. If you are meeting your goal, decide whether you should make the goal harder, such as saving $800 a month instead of $666 to reach your emergency goal quicker.

I’ve been fortunate to have reached many of my financial goals over the last few years but it has taken a few years and a lot of discipline and sacrifice. What are my goals for this year? One of my most important 2013 goals is to help  you find financial peace of mind!

Happy Remainder of the New Year!