How to hit the “Reset Button” For 2016
As always we are swamped with tips, tricks and numerous how do’s on how we are supposed to get the jump on the new year with new ways to make & keep our resolutions.
Usually I try and avoid them but yesterday, before I realised it, I found myself engrossed in exactly one of these articles I found in the Personal Finance pages of the www.forbes.com website. I guess my excuses for getting there in the first place is that I generally read alot of content from Forbes as I find it quite well written and relevant, secondly the contributor, Neale Godfrey, is a writer whom I respect.
In the article Neale framed you by putting you near the end of 2015, that’s right December 31st and even got you to visualise that you were popping the bubbly while reflecting on 2015. Neale goes on to frame it further by planting the self dialogues that this past year was a rewarding one; however, you’re left with a nagging feeling that you could have done better. You’re determined to improve things in the New Year.
Does this sound like you…unfortunately as much as I have achieved this year there were a few stones unturned, surely I can’t be alone?
Whilst Neale then goes on to talk about the American population I am guessing the Australian population can’t be too dissimilar, can it?
Apparently she believes most Americans will be joining me, or rather should I say “Us” in trying to push the “Reset Button” on this special night. In fact, according to the Sydney Morning Herald, about half of Australians make resolutions, with an 88% failure rate.
Ok, now don’t get too dismayes, that still leave 12% right!
Neale goes on to point out that the thought of resolutions, or breaking resolutions, are not something new. Apparently the Babylonians made promises to their gods at the start of each year to return borrowed objects and pay their debts. In Medieval times, the knights took the “peacock vow” at the end of the Christmas season to re-affirm their commitment to chivalry. (By the way, what happened to chivalry?)
According to 2DayFM the top resolutions for Australians usually center on weight loss, staying fit & healthy, enjoying life to the fullest, spending & saving money (less of one more of the other) & time management.
The next most important resolutions include things such as quitting smoking, falling in love & spending more time with family.
Money & finance does factor in the list but most would say that without some of the others well being in the money and finance stakes would not really matter. Money does, however, in our ongoing well being and dealing with money is an everyday dilemma for some. Even if you don’t buy something for a day, your mortgage or rent is still adding up, your utility bills are still mounting, and hopefully – that’s a big hopefully, your investment portfolio is still increasing.
Money issues happen to you, whether you like it or not. Wouldn’t you like to proactively do something about them?
None of us wants to be a victim to our money. So, keep reading.
Neale, like myself, is not an expert on dieting and health, so from here on we will stick with money. The reason most people crashed on their “Money Resolutions” is that they were probably too vague. Do any of these sound familiar?
“I’ll create a budget.”
“I’ll pay off my debt.”
“I’ll spend less money.”
“I’ll save more money.” And so on and so forth…
To achieve anything that resembles lasting success you really do need a real plan with real goals and real accountability (I love this word!). Invariably one day will slip into the next and, before you know it, the chivalrous knight, referred to above, decides that the damsel in distress can get her own feet muddy; he is not going to ruin another perfectly clean cape!
Our intentions are not good enough; our actions have to reflect them.
Neale’s 4 simple resolutions to create lasting change are as follows:
Resolution #1: Create A Budget
Neale suggests picking a budgeting tool that you like and enter real numbers. There are tons of options out there to assist you, if you’re a Baby Boomers don’t stress too much about the technology, a pen and paper may be just fine, and as for Millennials, Neale suggests a few online solutions in her article but as we are in Australia the Inspired Money team suggest you to take a look at Money Brilliant. The big thing is to discuss your hopes and dreams with your partner and family, don’t just decide that you will do this in isolation. You are setting goals around where to live and work, whether to have children and how you’ll feed those children, how to include entertainment…get the drill. There is a foolproof way to make this successful…DO IT. Look at it each month. Discuss it. See what worked and what didn’t. This is not some cute exercise; it is your roadmap for life, Your Life.
Resolution #2: Pay Off Debt
With interest rates at all time lows, this resolution is a no brainer, particularly if the debt is personal debt by nature. That means you need a number in your budget, thus refer to Resolution #1. The number is a challenge to be met each month. You and your partner should discuss it at the end of each month and see if you met your goal and if not, why not? I put this before Resolution #3, which is to Spend Less, because the debt is going to really bog you down for a long time. Debt is like carrying around that extra 30 lbs. It could hamper everything you want in your life.
Resolution #3: Spend Less Money
You know I’ll send you back to your budget, but that is the point. Again, this is a group activity; you can’t be the only one in the family committing to spending less. Each member should come up with ideas that will work for everyone. Make this a challenge; Neale has some creative suggestions to help this & here are some ways:
- Always look for coupons. There are tons online and they still come in the mail. Groupon is the most popular online site, with an estimated 30 million visitors per month.
- Stay away from credit cards. You should have one to build your credit. And, it looks shady to most places, if you try to always pay in cash. In fact, some hotels won’t let you just pay in cash.
- Manage your bonus. If you get a bonus, use one third (after tax) to pay down debt, one third to put into savings and one third to spend on yourselves. You deserve it.
Resolution #4: Invest Your Savings
There are plenty online options to assist you here, however I will always suggest that getting advice early in this space will always save you time and money in the future. Both Neale and I can be heard harping on about investing because it simply is really important. Many people advise that you should start investing after you have paid off your debt. That’s bad advice. You should be building the airplane while you are flying it. You need both emergency money and long-term investing. I like personally like using index funds or Exchange Traded Funds (commonly called ETF’s) in order to diversify and keep costs down. Make investing a monthly habit that is built into your budget.
Inspired Money specialises in creating and implementing the financial plans Neale refers to. It’s our focus that with anything we implement a strict review and accountability system is followed. Id you don’t want to fall into the 88% of failed New Year’s resolutions for 2016 please give us a call on 08 6222 7909 or email one of the team on support@inspiredmoney.com.au and we would be only too happy to hold your hand through the process and be by your side kicking some goals with your 2016 resolutions.
