The New Year is upon us and with that comes New Year's resolutions that research shows few people ever stick with. Strava, the social networking site for athletes, showed that after studying 800 million user activity data points, by January 19th most had already abandoned their resolutions - just 19 days into the new year!
A study conducted by University of Scranton found that only 8 percent of people succeed in keeping their resolutions. Maybe you can relate to these studies having failed to keep your own goals. We certainly can.
Setting goals is the easy part. Actually accomplishing them is the real challenge!
Let's look at some tactics you might consider to improve your chance of looking back on 2020 as your best year ever, especially in your personal finances.
1. Start routinely talking about your behavior with money.
You've heard us say it before, "money is not the root cause of your money problems. It's your behavior with your money that is the root cause." More money might temporarily solve your issues, but without a change in your behavior with your money the fix would be short-lived.
When you start to talk about how you're behaving with your money you will become aware of the bad and good behaviors. This can lead to repeating the good and eliminating the bad. Consider scheduling a money date each month to discuss your behavior.
2. Set small goals.
Whether or not we want to admit it, most of us don't like change. At the root of change is fear of the unknown. To overcome fear of change and to make it easier we suggest setting small goals that are easy to accomplish in 90 days or less.
There's nothing wrong with big challenging goals, but they often require massive effort to achieve. Instead, take your big goals and break them into tiny goals that you can quickly accomplish to build momentum toward the bigger goal.
For example, if your goal is to pay off $100K in 2020, divide the total into the number of pay periods you have during the year and make that tiny goal your focus. Something happens in our minds when we see a goal to pay $3,800 every two weeks compared to a goal to pay $100K. The smaller goal always looks easier because it is, and with it comes the momentum to tackle the bigger goal without focusing on it.
3. Share your goals and progress with someone routinely.
When you are the only one who knows about your goals you are more likley to fail. Research in goal setting has shown when you set goals the probability of success goes up when you:
4. Start budgeting every dollar every month.
This is probably the most difficult of our suggestions to start your New Year with, but if you don't take control of your money it is not going to do what you want it to do on its own.
We suggest using a simple tool like Every Dollar that is connected to your bank accounts to make the budgeting process easier. If you struggle with budgeting consider focusing on just a few key categories (i.e. food, housing, clothing, transportation, and debt) in your budget to track, and then as you make progress start to track all other spending.
5. Take time each month to do nothing but think and reflect.
When was the last time you said or heard someone say, "I spend too much time thinking and reflecting on life." Probably never, right? However, there is great value in making a goal to spend at least a few minutes each month thinking about your life and progress on becoming a DFMD.
Your thoughts can become the fuel to your actions, especially when they are positive thoughts of progress you're making in your personal finances. Thoughts can also help you correct bad behaviors getting in the way of success.
So here's to your best year ever!
You have the power to make 2020 the year you finally took control of your personal finances that led to changing your life forever.
You can do this!
All you have to do is decide this year is not going to be a wasted year when it comes to your money.
Start talking about your finances. Set a few small goals that you can accomplish quickly to build momentum. Write those goals down somewhere you can see them daily and share them with your spouse or best friend to check in on your progress every few weeks. Make a plan for your money by starting a monthly budget, and if that's a big challenge just focus on the big spend stuff to gain some traction. Finally, stop every so often to look back and ask, "What am I doing well I should keep doing?", and "What do I need to stop doing if I want to win with my money?"
Take a step forward right now by doing something positive to make 2020 your best year ever.