I wrote a couple months ago on year-end planning for your financial life, and in it I mentioned beginning to think about your goals for next year. Fast forward those short 60 days and the new year is upon us! So while it’s said that most resolutions fail by February, I’m hoping this quick read will help you not only solidify some of your financial New Year’s resolutions, but also sustain them throughout the entire year (and beyond).
Some Examples of Financial New Year’s Resolutions
If you don’t yet have a plan (with us 😉), my first recommendation for a New Year resolution is to get yourself a plan. Notice I didn’t say to get on a budget or start pinching pennies. First step is to just get a plan – it will give you an objective perspective of where you are today and based on your current situation, what your future will/could look like.
The next resolution I recommend is to get your financial life in organized. Generally, by getting on a plan, the organization follows. But I don’t just mean figuring out where everything is. I also mean getting any estate documents updated and/or in place and aligning beneficiaries with those documents; revisiting any business agreements you may have; confirming with HR that you’re contributing what you think you’re contributing to retirement; have a plan to pay off debt; etc.
In case the first two don’t make it obvious enough, I’m a big believer that “failing to prepare is preparing to fail” holds true ESPECIALLY for your financial life. Far too many people get to retirement age and have no clue what life is supposed to look like for them. With sound planning, you’ll go into retirement with all the confidence and enjoyment for which you’ve worked so hard.
A few more examples of financial New Year’s resolutions might be to increase the amount you’re saving each month/year; max out retirement limits; increase your ‘emergency’ fund by a month; or reduce frivolous spending.
The last one I’d like to bring to your attention which doesn’t get thought of much in the financial column is getting healthy. Wait, say whaaaat?! Yep – type into Google “health care costs in retirement” and you’ll see numbers such as $285,000, $390,000, and 14% of income. Health care in retirement is expected to be one of the highest (if not THE highest) expenses you’ll incur. By getting and staying healthy prior to retirement, you’re setting yourself up for massive savings in retirement by eliminating the additional costs associated with avoidable poor-health illnesses.
Keeping the Resolutions
When you read the news and hear rumblings of all the debt and economic crises and so on, you might think it’s really difficult to keep financial goals in these tough times. But believe it or not, it’s probably easier than ever thanks to technology.
Because of technology we can automate just about everything – saving an extra $100 (or more) each month; paying down debt by an extra $100 (or more); etc. Banking apps let us do automatic, recurring transfers between accounts; automatic bill pay let’s us do the same for debt. By using automation to your advantage, you don’t have to remember to keep your resolution, it happens even while you sleep.
Another way to leverage technology is by keeping your goals always available and measurable. Financial apps such as Mint, Personal Capital, YNAB, and EveryDollar make it incredibly easy to stay on track with your goals. Plus, since you’re updating them daily and in real time, you’ve got constant motivation in seeing the progress you’re making. The highs of seeing that progress bar move just a little further become addicting.
With every new year comes new goals, new milestones, and new challenges. We’re on a special one with the coming of a new decade so people are aiming even higher, setting even bigger goals. While I’m not intending to encourage outlandish and unrealistic goals, I am taking advantage of the magic that fills the air with the coming of a new year and giving you that little nudge to dream (financially) bigger.
If we can help you reach those dreams, we’re only an email or a phone call away. Happy Holidays, can’t wait to see you in the new year!