January is the time we traditionally set goals for the year, but for too many of us they’re all but forgotten by February. Implementing some simple strategies – such as visualisation, accountability and rewarding yourself for staying the course – can help keep you on track throughout the year.
Automate your savings
One of the easiest ways to stick to goals around saving and paying off debt is to automate your savings and debt payments. This way you remove the temptation to spend the money instead and get out of your own way!
For example, set up automatic direct-debits to nominated savings accounts for various goals, such as a ‘holiday’ fund or a long-term savings account for a major goal – you can even rename the account so you can visualise the goal. Set the money to be taken out of your account right after you get paid and you won’t even miss it.
Another good trick is to try and slowly increase your savings. Say your ultimate target is to save 30% of what you earn. You could start with just 10% and automate that savings so that you soon get used to living on that much less. Then, every few months increase it by one or two percent. Over a year or two you’ll be saving a lot more and, because you’ve done it gradually, it shouldn’t feel like a huge leap.
Invest for the future
If one of your goals is to start or stick to an investment strategy, instead of worrying about what the market is doing right now, set up a small, regular automatic investment and stick to it no matter what shape the economy is in currently. The market will always be a bit of a rollercoaster and even the experts can’t always predict what will happen.
Figure out what your long-term goals are, including how comfortable you are with volatility and when you will need the money, and then stick to a consistent plan. Even small monthly amounts can accumulate over time to significant investments.
If you have some spare funds saved, buying shares when the market is down is a great way to obtain a reduced share price; when the market bounces back, you can watch the shares increase and count your dollars.
See yourself in the future
One of the big challenges with staying on track with a financial resolution is reminding yourself of the purpose of it. To maintain your motivation, your financial goal has to be compelling, so it can really help if you can visualise the impact that achieving it will have on your life.
Try creating a visual map of your financial goal, from where you are now to where you want to be in one year, five years or ten years. Put it somewhere prominent where you will see it regularly. Try other visual tools too, such as a vision board with images of your goals – they might be a new car, home, holiday or education for your children or grandchildren. Simply having images that represent these goals stuck on your fridge can help keep them top of mind, which should help you stay motivated when saving feels hard and spending temptations loom.
Set small, achievable goals
One major reason New Year’s resolutions fail is that we often set huge, grand goals at the start of the year, such as ‘lose 20 kilograms’ or ‘save a deposit for a home’. Think about what you can realistically achieve in a year. Then, break those goals down into even smaller, more attainable chunks. For example, if your goal is to save $10,000 this year, that’s $5,000 in 6 months or $28 a day. Set ways to measure your progress regularly and be sure to reward yourself for hitting your milestones along the way! A treat could be a little pedicure or a night out with the boys – just don’t go so crazy that your treat derails your progress!
Find a way to keep yourself accountable for sticking to your goals. This could be an annual meeting with your financial advisor, a monthly date night with your spouse when you sit down and review your goals or partnering up with a friend and checking in regularly. I have organised with a friend of mine to Facetime every two weeks to keep us on our goal paths this year. This should keep us accountable to each other – even though we are living on opposite sides of the world!
We’re always excited to help our clients reach their goals. Call us anytime on (02) 8268 2900 to chat about how we can help.