Financial Resolutions: 5 Tips to keep you AccountableSubmitted by Davenport Watts & Drake Investment Advisors, LLC on December 15th, 2017
After the ball drops on New Year’s Eve, we dig up our hopes & dreams and make some resolutions; getting back in the gym, losing weight, and eating clean, 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 keep and reach your goals.
1. Turn Dream into Goals
Dreams are something the heart wants and the mind can envision whether that’s 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 actionable goals. Financial goals operate like any other goal in the way that they benefit greatly from being written and planned at SMART: specific, measurable, attainable or agreed-upon, realistic, and time-based.
Taking a big dream and breaking it down into something that features clear-cut amounts and is tied to a certain time can be difficult, but that’s the purpose of SMART goals—to make you think with intention about your goals before agreeing to 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 before solidifying the goal(s) you’re going to stick to.
2. Baby Steps
If you’re saving for something big like a down payment on a house or want to completely pay off a maxed out credit card, those are huge numbers at face value. But, if you set a miniature step such as saving $125 a week that you will then put toward the payment or bill it becomes more manageable. After even six months that weekly savings will have added up to a significant number that will cut away at the greater goal. Set a plan of how you can save that $125 a week by reasonable cutting down on extraneous expenses (coffee shop lattes, shoe shopping, sports tickets) more often than you have in the past.
3. Slip-Ups Will Happen
We’re not perfect people, and it’s wrong to assume that just because you’ve set a financial goal the journey to that goal will be without a few pitfalls. If saving, investing, and reaching financial goals were easy, you likely would have already done so. Say your goal is pay off all credit card debt over the next 10 months, but you end up spending extra cash flow on a spontaneous trip. It’s okay, but don’t beat yourself after the fact or think that because of one diversion your whole goal is caput.
4. Get a Personal Trainer for your Money
When we make exercise and weight loss goals one of the first things you should do is invest in a personal trainer—someone to hold you accountable for your goals. Consider a financial advisor your guru to get your portfolio in shape. If you already have such an advisor get back in regular contact 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 in your contact list that’s your first step (e.g. Davenport Watts & Drake at 601-898-8069).
5. Regular Review
The New Year’s celebrations only come around once a year, but that doesn’t mean you have to wait until December’s end to refocus and reevaluate. Set a calendar reminder to regularly review your financial goals in increments that make sense for your monetary goals (whether that’s once a week, month, or quarter). During these review sessions (that should sometimes include your financial advisor) be thorough and honest with your progress and setbacks.