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After all the December activities, I know some of you will relate with not wanting to get on a scale or open your credit card statement when it arrives in January. Something about December impacts how we behave and act towards our nutrition and financial decisions. I am no expert on behavioral science, but I know that for some reason, during December, I deviate from my usual healthy eating routine and spending pattern. Perhaps it's the feeling of hope, joy, carefreeness, and gratitude that fills the holidays. It may cause us to overindulge with food or overspend, creating feelings of regret in January. Be kind to yourself and focus on today and what you can do to set yourself up for future success. Focus on understanding your current picture, develop your future direction, and create small life-changing habits.
Understanding where you are today is vital to know what needs to change in the future. I know this can be a challenging and vulnerable position to face, but it's the first step to creating a different financial horizon. The primary measures of wealth are net worth and cash flow reports. The net worth report summarizes all your assets (what you own) minus your liabilities (what you owe). This report assists in staying organized by listing all your assets and liabilities to provide your current financial position. Learning how your financial actions impact your net worth is an excellent start to making informed financial decisions. Now let's move to the cash flow report, which will assist in reflecting how we used our money resources. There's something powerful about seeing your expenses summarized that allows us to consider how we use our money. Now you have your starting point!
New Year’s Resolutions
January is usually the month we intentionally focus on our well-being and setting new year's resolutions or intentions for the new year. Usually, most of the focus at the beginning of the year is on losing weight by starting a new exercise program or the latest diet craze but let's also plan for our financial life. Sometimes after the holidays, we may feel remiss about the attention given to our health and economic well-being.
To stay focused and intentional on my goals, I have selected a word for the year that I will use as my mantra. This is a practice that I have done for the last couple of years. This year my word is progress. In addition to the word of the year, I do a well-being self-assessment to see which area of my life is out of balance from where I want to be. This assessment covers physical, financial, intellectual, emotional, social, spiritual, and occupational.
I created a version of this assessment focusing on the financial aspect that makes up the economic foundation of our well-being. It focuses on where you are now, prioritizes the area that needs the most attention first, and is intentional on short-term and long-term deliverables that would assist in moving toward your desired goals.
Focus on what you want out of life, not what someone else has in their life. Even though we are all looking at the same areas of our financial life, the outcome is unique. Your goals differ from your sisters', friends', neighbors', or coworkers.' Each of us has different circumstances, resources, and money beliefs that impact how we manage our finances. Stay focused on your financial well-being. It may be helpful to work with an advisor to assist you in prioritizing and creating the action items to get you to your financial destiny.
Stay Committed
According to Forbes 80% of people abandon their New Year's resolutions by February. Maybe we lose steam. I know that because I want quick results and have a mile-long list of habits to change or improve, which becomes overwhelming. Abandoning my goals is especially true when I address a few extra pounds or the extra balance on the credit card that didn't happen overnight. But, let's face it, we want to do what we want and don't want to feel restricted. Changing a habit can be difficult, requiring discipline, but it's not impossible. Here are some ideas on how to get started.
Just Start! Don't wait until the beginning of the week, month, quarter, or year. The best time is now.
Have an accountability partner.
Start focusing on who you want to become. I mean that instead of a shopper, you want to be a saver or investor, instead of a sedentary person you want to be an active and healthy person.
Create a starting point by documenting your short-term goals. For example, walk 30 minutes daily or make coffee at home four days a week. You can use the funds saved by making coffee at home for one of your goals, or enroll automatically in your 401k plan.
Focus on one habit for two to three weeks before introducing a new one.
Every day is a new beginning. Start with a positive and encouraging mantra. Be your own cheerleader!
Lastly, try to have fun with it. Changing habits can be difficult, and you will have good days and bad days, be kind to yourself. Spend more time celebrating even the smallest win. Turn it into a game, and remember this is your choice to make these new habits to create your unique self.
How are you going to detox from the holidays? Do you have a fitness or a financial goal? Let us know if you would like a copy of the financial wellness self-assessment wheel to get you started.
References:
Advisory services offered through Corinthian Wealth Management, INC. an SEC Registered Investment Advisor.