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'Tis the Season

Making Reasonable, Realistic and Achievable Plans in the New Year

“‘Tis the season!” – a phrase we've heard repeatedly over the past five weeks, signifying the onset of the holiday season and the inevitable busyness that ensues for everyone. As the calendar turns to January 1 and a new year begins, we can once again proclaim, “‘Tis the season!” – this time for resolutions, those aspirations we aim to achieve in the coming year. However, when it comes to resolutions, particularly in the realm of financial well-being, a resolution without a plan is merely a wish. Last time I checked, there aren’t any genie lamps lying around.

So, instead of wishing, what if we resolve to actually make a few things happen? What would that look like for us financially? Where would we even start? Here are a few things to think about if you’re going to make financial resolutions this year.

First, determine your goal. Write it down and share it with someone who will hold you accountable ---- this could be a friend or family member or financial advisor/professional. Your goal could be as simple as successful budgeting or more long-term and complex like saving for retirement, education or a major purchase. Once you've established your goal, craft a realistic plan to achieve it. Be honest with yourself about what you are really willing to commit to and start there. You may want to spend less on eating out because you want to save that money, but if that means having to say “no” to friends or family or needing to suggest other cost-efficient alternatives more often, will you stick to it? As you assess your willingness and ability to adhere to your plan, you might discover the need to adjust your goals in terms of size, scope or timeframe.

As you’re thinking about what you will stick to, consider breaking your goals down into smaller, more manageable chunks. This could involve creating an overarching goal and breaking it down into quarterly, monthly or weekly goals that will help you attain the larger, more ambitious one. So often we set a lofty goal and have the best intentions for succeeding, but when we fall behind, we often find ourselves in a downward spiral that results in giving up altogether. If we’ve taken our big goal and broken it down across smaller goals, our minds have an easier time resetting and getting back on track. 

No matter what, when setting out to accomplish a financial goal, whether in the short or long run, one of the greatest keys to success is simply to have a plan. One of the mantras we regularly use when teaching personal finance is simply this: failing to plan is planning to fail. If you truly want to accomplish great things, you must make a reasonable, realistic plan that you’ll stick to and, in the end, achieve.

Guest writer Emily Dafferner, CFP®, CDFA® is a Financial Planner at Reliant Investment Management. She plays a key role in supporting the firm’s portfolio managers and working closely with clients and independent custodians.

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