New Year’s Financial Resolution
The first resolution we encourage you to take on this year should be the simplest, as it actually requires no action! All you have to do is not look at what the stock market is doing. Day-to-day market activity can be both exciting and terrifying, especially when you listen to the talking heads on CNBC. However, when you’re just looking at daily snapshots, the tickers don’t have much of an effect on your personal financial well-being. So, if those numbers don’t affect you, don’t look at them! The brain power you expend getting riled up about short-term market activity is better applied elsewhere.
Pay Yourself First
If your current savings plans is “I save whatever is left at the end of the month,” this resolution is for you. Instead of spending first and saving later, create a systematic savings plan for 2017. By designating a certain amount for savings every month, or every paycheck, you will be much more likely to meet your savings goals. One of the best ways to create a “pay yourself first” plan is to establish an automatic payment straight from your paycheck to your investment account. The plus side of this is if you never see the money in your checking account, you are less likely to miss it!
Have you ever enthusiastically started a strict diet plan only to relapse into old habits after a short amount of time? Establishing new habits is hard, and it can be even harder if you are too strict with yourself. This phenomenon is not limited to health goals; it can happen in your financial life as well. To combat burnout, if you meet your savings goal for three months in a row, treat yourself to that new thing you’ve been ogling. We’re not preaching asceticism here, just healthy financial habits! And just like it’s ok to indulge in that piece of cake every once in a while if you’re meeting your health goals, you can likewise reward yourself for staying on track financially.
When you make a New Year’s resolution, it is personal in nature. No one’s resolution is for everyone in America to start going to the gym. Your financial resolutions should be personal as well. You can’t have a resolution for the S&P 500 to go up by 10%, but you can have a resolution to save 10% of your salary. Control what you can control, and don’t sweat the rest.
While we suggest you adopt these resolutions for 2017, these are habits you should maintain past the end of the year. If you set a weight-loss goal, you don’t go back to eating cheeseburgers for every meal as soon as the scale reads your target number. Just like dieting is really about setting new eating habits that you can stick with, these New Year’s financial goals are designed to be sustainable. Financial health is a long-term endeavor, and you will be rewarded over time for establishing good habits now.