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I don’t have time for resolutions, but if I did, probably the first one would be to slow down a little. But like most of us, I’m always looking over my shoulder to see whether the bill collectors, overdue work tasks, needs of my kid-dog-cats-friends, excess pounds, etc. are catching up with me. Generally, they’ve outrun me. However, there is something I do every year during the last week of December (and finish up the first week of January, because, well, I’m late again).
I write down goals and I write myself an evaluation of the past year’s goals. I urge you to consider trying this—it’s not the goals, it’s the writing it down that matters. Why? Because too many of us get into trouble, financially and otherwise, by the natural human tendency to avoid the bad news. I would love to find that if I ignore things, they would go away. While this occasionally works with a part of the junk in my in-box, in general ignoring things or failing to face them causes them to grow into much bigger problems. To whit: ignore thinking about your retirement and along about 55 you’ll have a huge and nearly intractable problem. Ignore the real cost of your house, your car, or your children’s education and you’ll give yourself a whopping headache if not a full blown disaster.
Even if you think there’s nothing you can do, writing goals down forces you to 1)face the facts, 2)gather your records, 3)see what needs solving and 4)if you’re lucky, gain some insight and ideas. I can still hear one of my professors intoning, “Goals must be measurable: set objectives which can be evaluated.” He was speaking of governments (and ours could use that advice), but it’s a good policy personally. So, for example, don’t set a goal of saving more. Set a goal to save 10% (or 5% or $10) from each pay period. Better yet, set it up to be automatically withdrawn from your check or bank account.
One of my goals is to automate everything possible. Since I often feel that my head will explode from details, I’m trying to make a good decision once, and then ensure that that decision operates on its own, with no further choice from me. So, in the financial world, if you automate your savings, you have some likelihood of actually having money to invest down the road. Then, you set your “investment policy”—the right mix of investments designed to get you to your financial goals. And once you’ve thought that through (perhaps with your financial advisor), you automate THAT—with rebalancing out of all the crummy investments and into a decent mix. From that point on, you’re automated and you know where to put savings, and you won’t be prey to the newest hot idea from your neighborhood stock broker, insurance agent, or other commissioned salesperson trolling for suckers.
Resolutions generally engender guilt, but that has little place in real achievement. I evaluate last year not to beat myself up on the (inevitably) huge amount of goals that were not met, but to try to understand why they did not come about, what could be done to improve in the future, and to get better at allocating time and resources. I firmly believe in dreaming big, and am happy to see, each year, that there is a satisfying amount of things that were achieved. Also, I break down goals into business, financial, personal, and family, and I can get a good picture of what has been given too much attention, and what, not enough.
So, take a look. Whatever you’re avoiding probably isn’t going away. On the other hand, making a plan wrests some control away from random forces and into your hands. We can’t fix everything, but we can control the stuff that depends on our own efforts. Make that effort and best wishes for a prosperous new year.