Looking Ahead: New Year, Bright Future
Kathy Longo, CFP®, CAP®, CDFA Monday, 07 January 2019
It’s that time of year again, fresh starts, new beginnings and a long list of resolutions. We all have them, probably a little bit more exercise, eat better, tackle debt, save more. These are things we all could be better at and so this year, instead of putting them back on the shelf after a few half-hearted attempts, let’s go over some ways to actually reach your goals. It’s great to sip champagne and think of all the things you will do better this year, now imagine how much greater it will feel to actually accomplish those goals at the year’s end?
The first step is really to ask yourself why these are your goals. Why do you want to change and, if the same resolutions crop up every year, why haven’t you done it already? If the challenge is overeating, for example, perhaps the issue is more about the reason you are eating poorly or too much and not so much the weight gain. That root cause may be something else entirely, so following the thread along to the source may reveal that the thing that needs changing is not what you originally thought it was. Instead of another strict fad diet, perhaps a visit to a therapist to discuss stress-eating or depression may be the best route toward your goal. We often seek out unhealthy behaviors for their pleasurable, albeit often brief, payoffs.[i] So, before setting goals, looking at why you eat or spend, for example, may aid clarity to the goal.
In this article, we will go over some of the major resolutions and some steps to help you reach them.
Breaking Big Goals into Smaller Sub-Goals and Checkpoints
Two of the big resolutions are to exercise more and to eat better. Both of which will help to lose those extra pounds (which also tend to be on that resolution list). So, how can we do that? Avoid another year of attempting a dry January or starting a gym membership that lies fallow by March with little actual change. The main goal is to take small steps instead of jumping into a new routine, cutting out the majority of the food pyramid, and duct-taping yourself to a treadmill. It’s good to dream big and set lofty goals, but sometimes a goal is too big and feels too far to reach. Finding the balance between unrealistic and attainable is key, and the first step of that is to break down the big goal into smaller steps with checkpoints along the way to mark your progress. Having small victories will help to reward you along the way instead of only a big final payoff at the end. So weekly goals, like walking one mile, then two miles the next week etc. may be a good motivator. Small dietary changes, like cutting certain foods or sodium, or cooking at home more, can be the small checkpoint victories that lead to a big lifestyle change. Bringing sub-goals to reach big goals will incentivize and make the process more fun and keep you on track.
If your resolution is money related, then you are part of the 84% of Americans who set financial goals as their 2018 resolution.[ii] The same rule applies to create a big goal and then a series of smaller checkpoint sub-goals to reach it. If tackling debt is the resolution you’d most like to accomplish this year, you need to plan. For example, attack whichever debt charges the highest interest first and work from there. If the goal is to save more for retirement, an easy first step is making sure you are taking advantage of all workplace match options for your 401(k). Having certain percentages of your paycheck going directly into different accounts may help save money with very little effort once it's set up. Another small step may be meeting with a financial advisor, sharing your goals and creating a plan to reach them. Once you understand how much you actually need and create a spending plan factoring in living expenses, taxes, and fees, your goal will be more specific and less abstract, making it easier to stick to.[iii] Whatever it is you want to do, breaking the goal down to small daily, weekly, or monthly monetary checkpoints will show your progress and help build confidence. Rome wasn’t built in a day and any big goal will take time and effort, but like Rome, brick by brick you can reach your goals.
Factor in Obstacles
Life Happens. You are saving or paying off and then something breaks, a big expense comes up, you get laid off, you have a health issue. Whatever it is, it can completely knock you off track. So, since none of us has a crystal ball, the best thing we can do is to plan for challenges and obstacles that may get in the way of our goals. Before you start funneling money into a retirement account or a large credit card bill, for example, make sure you have a robust emergency fund. Having a diverse portfolio will help with any market volatility.[iv] A good resolution goal will be malleable enough to adapt to a changing situation and have options if some unplanned element drops into your lap. Any long-term goal that is worth having is also worth adapting for, so being adaptable in the face of the unexpected will help you reach your goals.
Be Realistic and Kind to Yourself
As stated above, life happens. With important life goals, the challenge will be getting back up when you fall and staying the course. By planning contingencies for obstacles and setbacks and building smaller, more attainable checkpoints and sub-goals, the odds are good you will be able to stay on track. By spending a little more time exploring why the resolutions are important to you and crafting a more refined, realistic and specific path to reaching your goals, you are much more likely to achieve them.
To reaching your goals and flourishing in the new year!
About the Author
Kathy Longo, CFP®, CAP®, CDFA
Kathy Longo brings over 25 years of expertise and experience to Flourish Wealth Management. Kathy is wholly dedicated to improving the life of each client and finds joy in making complex matters simple and easy to understand. She excels at asking the right questions, uncovering new possibilities and implementing the most advantageous strategies for success. Playing such a pivotal role in her clients’ lives remains an honor and a privilege. After earning a degree in Financial Planning and Counseling from Purdue University, she began her career at a small firm in Palatine, Illinois where she worked directly with clients while learning to build a viable, client-centric business. Over the years, she gained extensive knowledge and wisdom working as a wealth manager, financial planner, firm manager and business owner at notable, various sized companies in both Chicago and Minneapolis.