- It’s never too late to be who you might have been.
- George Eliot – English novelist (1819 – 1880)
The New Year has come and gone. The world keeps on moving. Headlines depict stories of airplanes landing in the Hudson and presidential inaugurations, and they provide us with fuzzy memories of those resolutions we vowed to uphold oh so long ago. What, if anything, can we do about it? Here are some tips & thoughts on New Years Resolutions.
The Bad News
Resolutions alone do not work!
All a “resolution” does is merely promise to do something. It is a declaration of intent; or a statement that you resolve to act upon something. Especially when coupled with the New Year, resolutions are almost wishful thinking from the start if you examine a person’s attitudes — and I’m as guilty as the next guy! Here’s some typical New Years resolutions (with their corresponding underlying motivation included):
- I really should quit smoking; I know it’s bad for my health.
- I need to lose some weight and eat healthier.
- I need to start working out.
- I gotta get a handle on these bills and start saving for retirement.
- I’d like to spend less time at work & more time with my family.
The Good News
You will succeed if you create a Plan to follow through with your resolution.
A resolution identifies your wishes. A plan adds integrity to your words by providing a detailed course of action. A good plan will keep you on track and give you a sense of purpose.
Tips for Setting Goals
Like others, I advocate setting S.M.A.R.T. goals, where your goals are:
- Specific — be particular about what exactly you want to accomplish
- Measurable — make it something that you can tangibly evaluate. Give yourself check-points or building blocks that you can use as markers of success.
- Attainable — (see below)
- Realistic — similar to Attainable, make it something within reach. If a goal is too lofty to begin with, you will quit because you don’t give yourself the psychological boost of accomplishment.
- Time-based — set a time by which you accomplish your goal; a goal with an open-ended time frame will put you back at “resolution” status.
However, I would alter the “A” to stand for Accountability. When setting goals, accountability is key. If you’re married, a spouse is the perfect accountability partner for your household finances. Working out with a buddy is a great way to stick with your fitness goals.
My Financial Goals for 2009
In discussing this year’s overall financial outlook with The Lovely Miss H, we’ve come up with a few financial goals we hope to attain and we have a plan for success:
1. Pay off H’s Car Loan
Back in 2006, we bought a 2004 Saab 9-3 on eBay (a post for another day!). With an expected bonus, the remainder of this note will be paid off no later than February! This is personally exciting to me, because this will be the final consumer debt remaining on our snowball. Only student loans to go!
2. Pay off My Bar Study Loan
Balance-wise, it is a very small educational loan. But we want to just pay it off to use the extra $50/month to add to our snowball! Plan is to have done by February as well.
3. Establish a “tweener” Emergency Fund
If you are extremely focused and intent on paying off your debt in an 18-24 month period, Dave Ramsey recommends a “baby” Emergency Fund of $1,000 to protect you from falling off the wagon back into credit card debt. Once this is paid off, you then fully fund your Emergency Fund with 3 to 6 months expenses.
Since our student loans are a little more long-term than the consumer debt we’re about to pay off, we want to establish a “tweener” Emergency Fund of $10,000 by July. This would give us a little more cushion so we can begin to attack & pay down our student loans.
4. Pay off H’s Parent Plus Loan from College
A moderately-sized loan in our world, we took this loan back over from H’s parents after getting jobs. We just thought it was the right thing to do. We believe it is attainable to knock this out in the 2nd half of the year, and have it paid off by December.
5. Begin saving for future car
I drive a 2001 Nissan Maxima with 180,000 miles on it. It’s been a decent car for me, but eventually we will need to replace it. In order to avoid getting back into car payments, we need to start saving. Unfortunately, this remains in the “resolution” department, because no specific time-frame has been put on this goal. Just proves that even us cool kids on the Internet aren’t perfect either!
NOT S.M.A.R.T. approved
It’s Never Too Late!
The beauty of the New Year is that it makes a great marker on the calendar to begin anew. But like the quote above says, it is never too late to get started! If you have a Plan that puts integrity to your Resolution, any day is a great day to start!
What are your experiences with New Years Resolutions?