This year has been one for the books and if there’s one lesson that continues to ring true it’s: prepare for the unknown while staying committed to your financial journey. We’ve all had our shares of financial challenges – but it’s possible to overcome financial setbacks. As we wind down and begin to evaluate our strategy for the years to come, take a look at some tangible ways we can reignite our financial focus.
Take Inventory Of The Wins (And Lessons) From The Previous Year
Imagine yourself from the perspective of someone else — – if you weren’t aware of your own financial makeup and history, how would you assess yourself? Are there patterns, purchases, or spending habits that you would like to change? Pull back the layers and reflect on your financial decisions, setbacks, and accomplishments, month by month. This exercise can help you identify patterns that you may not have noticed. Slowing down from the whirlwind of our lives can present opportunities we may have overlooked unintentionally. Viewing your life from a different lens, what are things that you have accomplished and excelled in financially? Identifying the wins is just as significant (if not more important) than pinpointing the lessons. Be sure to document these and keep them handy to help motivate you as you plan for the future.
Maintain A Positive Outlook
Each year will be accompanied by varying challenges that can make it difficult for even the most positive, optimistic person in the world. Boosting your confidence as it relates to finances is a daily practice – and in a world where it’s often easier to point out what’s wrong, make it a habit to celebrate what is actually going well. If monthly bills were once a pain point and now you’re paying all your bills and on time, celebrate that! If you were able to pay off a credit card or reduce your overall debt, cheers are in order! During this ever-winding financial journey, you will have to constantly remind yourself of the ‘why’. Your commitment to your finances and the attitude that you approach it to make all of the difference. Optimism doesn’t replace the hard work, but it does make it a lot smoother to stay the course.
Don’t Wait For A New Year – Start Now
We often wait for a new month or year to set goals. However, goal setting – especially in the world of finances can occur whenever you decide to make a change. Take a moment to think about what a comfortable world looks like for you. Is it the ability to go on vacation at the drop of a dime? Is it being completely debt-free? Would you like to send your children off to college and front the bill? Or, is it watching your savings account grow? Or making a downpayment on your dream home? Answering this question honestly will help create the perfect guide to a financial roadmap for you and your family.
Identify at least three financial goals to serve as a starting point. Think of this plan as a GPS, it can’t tell you where to go without a clear destination in the habit of writing your financial goals and revisit them as often as you need to, to stay on track. Don’t underestimate the importance of engaging your family because finances can very well be an interactive process. If you have children, incorporate them so they are able to understand at an early age why it’s important to set financial goals intentionally. Not only does this create a new environment to keep you accountable, but it also develops a financial muscle for your children.
Remain Financially Flexible
As life evolves, so do our wants and needs. Kids grow an inch every day. Parents age. Your personal desires change and you develop new interests. Emergencies happen, oftentimes with no warning. Make sure your finances can weather life’s storms. Start where you are! Many people are intimidated by setting and committing to savings goals. If possible, set up an automatic deposit every pay period specifically for your savings. If you have money remaining in your checking account after all bills have been handled, feel free to throw a portion of that into your savings as well.
There are no rules when it comes to savings and this is a good thing! Do whatever works best for you and your family until you have a strong financial foundation. Increase the percentage or amount over time and adjust as necessary. Create various buckets for savings accounts – such as entertainment, household repairs, extracurricular activities for the children, or even large purchases. A savings account can help to alleviate financial pressure; remember it is there to help when you need it!
Develop New Habits and Commit To The Process
Once you’ve done the gritty work and identified what you would like to change, shift gears and loosely create different strategies you can implement at your own pace to help you achieve your new goals. If one of your values is centered around travel, develop a plan that allows you to do that without the unnecessary hassle of wiping out your savings account or taking on unwanted debt. Creating a side hustle, saving an extra $100 per paycheck, automating your financial portfolio, or eliminating a recurring expense are all very tangible ways to help you crush your goals. Be easy on yourself; this takes time and commitment.
Once your momentum increases, nothing can stop you or hold you back! As you continue to work on your plan, you will be able to identify and recognize what methods are best suited for you and your family. As you make progress towards your goals, you’ll start to take control of your finances, instead of allowing your finances to control you. Start the New Year off right by committing to yourself and your finances!