According to surveys, about 80 per cent of New Year's resolutions fail by the second week of February. So how do the 20 per cent who succeed stick to them? There may be no single answer but if you're determined to turn your New Year's resolutions about money into healthy new habits, here are a few ways to stay resolved and see results.
NARROW YOUR FOCUS
Financial planning and budgeting can seem overwhelming if you try to 'boil the ocean' by setting too many financial resolutions. Narrow your focus to one or two priorities for the year. It could be reducing debt, saving for one major purchase or adding to the most tax-efficient investment option for you and your family. If you're not sure what to make your No. 1 priority, ask your Lawyers Financial Advisor to review your situation and recommend where you should focus this year's energy.
AUTOMATE EVERYTHING YOU CAN
Almost any financial task can be automated. If you want to put more money into savings, set up automatic transfers from each paycheque into a savings or investment account. If you're already doing that, great – consider increasing your contribution. If you want to give more to charity, set up monthly donations to spread the cost over time. Most charities prefer monthly contributions, anyway. And once you start making automatic contributions to important goals, you're less likely to change your mind. Starting early in the year will get you on track and help you stay there.
FOCUS ON GAINS
Resolutions that require you to give something up are doomed. That's why you need to focus on what you gain by staying resolved. For example, if your resolution is to save more for retirement, don't think about the effects on your travel budget now. Focus on how well you can travel when you retire.
TRACK YOUR PROGRESS
Achieving long-term goals can be difficult because you have to sacrifice today for rewards you might not enjoy for 10 years or more. Tracking your progress is one way to bolster your resolve. Try not to check your balance every day. But do check it every three months or so. And remember, thanks to the power of compounding, money earning 6 percent per year doubles in about 12 years. Your Lawyers Financial Advisor can help you estimate how your savings can grow over time. That may be all the incentive you need.
Make a contract with yourself. If you're still committed to your goals in August and on track to reach them, reward yourself. It can be something as simple as a weekend away or something new for your home. This is one more way to keep your mind focused on the future.
DELEGATE, DELEGATE, DELEGATE
Paralysis by analysis can prevent you from making any New Year's financial resolutions and sticking to them. If you're not sure where to begin or what needs to be done, delegate. Ask your financial and tax-planning experts to recommend the best place to focus your attention in the coming year and instruct them to set up any automatic contributions or transfers needed to make it happen.
While 2021 will no doubt be unpredictable, don't let that keep you from starting the year with a clear set of priorities and putting plans in place to reach your goals. It's always easier to adjust a plan in progress than it is to start from scratch later.
There are lots of people who can help you set realistic resolutions and many ways to automate and delegate the tasks on your list. Stay focused, stay committed and keep your eyes on the long-term prize.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.