New Year's Resolutions
As the new year approaches with its promises of fresh starts and new beginnings, many people will be starting to pen down their New Year's resolutions.
It's a tradition that stretches back to the ancient Babylonians and was common in Julius Caesar's time. Creating New Year's resolutions can help you consolidate what you've done in your life so far and clarify your plans and dreams for the future, before setting out with renewed vigour to accomplish what you need to get there.
A 2012 study by the University of Scranton found that nearly 50% of all Americans make New Year's resolutions. However, only 8% are always successful in keeping them!
Yet not all is lost; the majority of people still manage to achieve some of what they resolved to do, and only 24% failed to keep every resolution every year.
So, what can you do to ensure you don't fall into that unlucky group?
One tip is to be realistic. Professor Katherine Milkman from the Wharton School of the University of Pennsylvania believes that the most valuable resolutions are those that challenge us but are not so difficult as to be entirely out-of-reach. Such goals (like abstaining completely from ice cream, waking up at 5am every day, or finding your soul mate) can be near-impossible to achieve, especially if success depends on factors that are entirely out of your hands.
For resolutions that are dependent on repeated successes, failing once (e.g. because your alarm clock ran out of battery) might cause you to just give up on all of it. So, give yourself a buffer zone or room for error.
If you want to get fitter, for instance, instead of resolving to exercise every day, you might resolve to exercise 3 times a week; that way, if you miss one day, you can always do it the next day. Similarly, instead of denying yourself snacks for the entire year, you could limit yourself to once a week – which is much more manageable, and also gives you something to look forward to!
It is also helpful to be more specific about your goals. Instead of something vague, like "I plan to be better at my job", try something more definite, like "I plan to become a better public speaker". This will allow you to more easily identify and take clearly-defined steps to realise that resolution. As you achieve each step, you'll also gain confidence and momentum that will spur you on towards the end point.
What about financial goals? Fidelity Investments surveyed more than 2,000 people in October and found that these were the top financial resolutions for 2019:
"I'm going to save more money." (48%)
"I want to get rid of debt." (29%)
"I'll spend less this year." (15%)
Those sound like very vague resolutions that are hard to achieve and hard to quantify. How much is "more money"? Maybe being a bit more specific could help:
"I want to set aside 10% of my income every month to build up my emergency fund."
"I will settle the account with the lowest debt first, and stop adding on to my existing debt by meeting the minimum payment each month."
"I will track my expenses for January with a journal, and use February to examine where I can cut down or find cheaper alternatives."
What would you personally like to achieve in the coming year?
If one of your goals is to set up your retirement plan, a easily achievable first step could be to set up an appointment with your financial adviser. What could be easier than that? The important thing is to first get started, and then plan incremental steps along the way. Other tricks that could help:
If you want to invest more of your idle funds, automate the transaction by setting up a Regular Savings Plan (or RSP) using GIRO, where a fixed pre-determined amount gets invested into your investment portfolio every month. That way, you won't have to think about it for the rest of the year.
Ask a close friend (or trusted adviser) to hold you accountable to meeting your goals.
Whether or not you eventually decide to make a New Year's resolution, it is always a good practice (and habit) to meet up with your financial adviser for a financial health check at the beginning of each year. Find out where you are in terms of your previously agreed financial goals, and enlist your adviser's help to stick to them. A similar approach can work with your non-financial resolutions too.
After you've made them, sharing those resolutions with your friends and family can help them hold you accountable, as well as know not to lead you astray by tempting you with things that may cause you to break those resolutions.
We hope this advice will help you in crafting your resolutions for 2019 and bring you ever closer to achieving your dreams!
On that note, we at GYC would like to wish all our valued clients a Happy New Year, and many blessings for the year ahead!
