While there is no rule set in stone that all goals must be made by January 1, there is something about starting a new year with a clean slate. Many people make some sort of New Year’s resolution around money. Most are forgotten by January 2. 🙂 Let’s make 2014 the year where you keep your resolution to take back control of your finances.
I fully believe within all of us exists a person who wants to own their financial lives. At the same time, we are also creatures of habit who will resist (sometimes even unconsciously) making the necessary changes. Before you begin, you must identify your pockets of resistance and address them now. Otherwise it will be much harder to achieve your goals.
I love goal-setting. Dreaming about what I want to accomplish is a lot of fun. Most people enjoy identifying their goals but then stop there. While dreaming is an important step, it’s not the only one you need to take.
Success Tip: Be sure to share your goals with your family and get their buy-in. It’s much easier to reach goals when your family is working together to achieve a common goal(s). It also makes it much easier for kids (and adults too) when money has a purpose, and can be used to weigh against things they find at the store. Use this as an opportunity to demonstrate good financial behavior to your kids.
The only way you can accurately do this is by following a budget. Budgets may be a dirty word in some households, but it’s time to let go of old beliefs and develop a budget mindset. Budgets don’t have to mean deprivation and can instead represent freedom. It begins by knowing how much money comes in and goes out. If you find your spending more than you make, you need to make some decisions on what stays and what you eliminate. Start with the low-hanging fruit first, such as canceling a gym membership you haven’t used in two years and go from there. Once your budget is under control, you can chose how to spend your discretionary money on the things that matter most to you without creating new debt.
This is always a popular goal and an incredibly worthy one too. It is also a hard one because you have most likely become accustomed to a lifestyle of saying “yes” to everything you want. No one likes to feel deprived and when you’re eliminating debt, it may feel like fun is off the table. So let’s get real. Consumer debt is NOT FUN. You may feel like you have freedom, but it is an illusion. What you have is a growing liability that puts your financial security and family at risk. I have watched too many people fall off their own fiscal cliff and can assure you it was not fun.
I won’t pretend that it’s easy, but your hard work and temporary, austere lifestyle is worth being debt-free and truly having financial freedom.
Success Tip: Be very clear on why eliminating debt will benefit your life. For some, being debt-free is enough motivation. Others will need to have a clear picture of what life will be like once they have financial freedom to stay motivated. Remember, debt didn’t happen overnight and eliminating it won’t happen overnight either. Staying motivated and focused is key. Talk to your family about debt to get their support and make the journey a bit easier.
The reason most people need to make New Year resolutions about money is because they are not financially literate. Most of us grew up in homes where money was a taboo topic. It’s time to break the cycle and start openly talking about money and educating yourself on how to use it in alignment with your values and goals. Money is emotional and too many of us associate fear, guilt and greed with money. I was taught money was a gift and dedicated my professional life to helping others use their money wisely on what brings them the greatest joy in their lives. And it starts by becoming financially literate. Educate yourself, your spouse or partner and your kids about money. This is an ongoing process and one of the greatest gifts you can give yourself and your family. Everyone handles money and having the confidence to make smart decisions with your money is key to long-term financial freedom.
Follow these steps and you’ll join an elite group (only 8%) who keep their New Year’s Resolutions. Even more importantly, you’ll have taken back control of your finances and can really focus on the things that matter most to you. What are your financial resolutions this year?
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SHANNON RYAN, CFP®
Have a great week!
Out of these 4 points, I have to become more financial literate and your post reminded me to reevaluate our goals for this year.
We paid off some bills this year so we need to look at how much we'll save a month and put it away or toward college.
Hope you had a great weekend! Have a great new week lady!
Marisa got her first job and she's asking me about a savings account and helping us pay for her Senior Trip to Germany next year.
It is a great feeling knowing she'll be better off than I was at her age.
Thanks for all your great tips! Have a great new week!
I would suggest monthly. Every month you should be doing at least one thing that will help you reach your goals.
Definitely financial literacy because you can get out of debt and still have bad habits. Within a little while you'll end up back at square one.
I think I need to educate myself about being financially literate too, and though one thinks one knows it all, but there are many places and instances where we can save, if we think about it. Yes, making your financial goals for the year is very important, why just the year - per week if you set your goals, your monthly expenses are very much in control, aren't they, which all adds up to your aim to spend within your required budget for the year. We do a lot of it that ways and it works. :)
Thanks for sharing. Have a nice weekend, and Happy New Year :)
Great success tips on finance. I was one of those gals who grew up in a home where talking money and finance was taboo for sure. It took me a while to get comfortable in a relationship talking about this topic. I'm glad that I have learned that I needed to teach my children to be ok with understanding and talking finance. Also, I think a great resource to become better at this is to stop being illiterate about it. I became comfortable by educating myself through great financial websites and resource tools.
Irish (Lisa)
It's a common practice to avoid talking about money in families and hopefully we can break that cycle. Everyone handles money in their lives and needs to feel confident in their money decisions. I'm glad you took control and became financially literate. More importantly, passed that knowledge onto your kids!
I know that when we made the decision two years ago to get rid of debt from our life, it was one of the best decisions we ever made.