First of all, a very happy new year from all of us at the Financial Freedom Academy ! We hope you got much needed rest and time with your loved ones during the holiday season.
2013 is here and we trust you are looking forward to making it a great year financially and in other ramifications of life.
This time of year is known for making resolutions; things to do differently in the New Year. However, it is common knowledge that by the end of the month most people have already done away with their resolutions. So we thought we’ll share with you a few ideas to getting off to a great start in 2013 and making your resolutions stick.
- Share Your Goals with Friends and Family
Peer pressure is a powerful tool and can be positive when used wisely and carefully. It’s a lot harder to balk and give up on our goal under pressure if we think someone is watching us. So be brave and publicise your goals in some shape or form to trusted friends and family; you’ll also feel good if you help others to achieve their goals.
If you are feeling brave, check out StickK. Co-founded by Dean Karlan, Professor of Economics at Yale University , SkickK is an online place that allows you to specify a goal, set some stakes (that you’d hate losing), find a referee who can help you keep on the straight and narrow (accountability) and then add friends for support.
- Focus on What Your Gain Rather Than What You Loose
Many of our goals go something like thi: ‘losing weight’ or ‘giving up smoking/alcohol’ etc. This means our brains concentrates on what we are trying to loose and the problem is we hate losing (Something behavioural finance experts call ‘loss aversion theory’). We’ll do anything to avoid ‘looses!’
This is partly why programmes like Weight Watchers are hugely effective; they get members to think about what they gain by being healthier, fitter, and more attractive and how they’ll feel when their goal is achieved rather than losing weight per se.
- Automate What You Can, But Be Intentional
There are a few things we pay for each month, whether we like it or not: mortgage/rent, childcare, council tax etc. Most of these are paid by direct debit but not all. So think about automating more stuff by paying them by direct debit.
This is also a good time to increase the amount you are paying towards your debts. If you have a credit card debt or a loan, speak to your bank about increasing your minimum payment.
You can also consider increasing your savings; your emergency funds or your retirement contribution, although we recommend you pay off your debt first (see this article for why).
However, it’s also a good idea to go through your direct debits and cancels things that you no longer use e.g gym membership? ( yeah, it’s always the victim!)
- Get Help, It’s Really Smart!
Everything is complicated these days but our finances are even more complicated. We are all too busy to budget and plan. Think of those unopened bank and credit card statements? What about your retirement account; when was the last time you looked at that? How about the children’s education saving, we haven’t even got started on those? Abandoned projects left right and centre? Well, welcome to the real world.
Sometimes even the thought of getting started is enough to paralyse us. We feel that it’s going to take an entire day or week or even month to ‘clear out’ and then we’ll be fine.
The problem is, that day/week/month never comes. Sometimes it takes a wakeup call; a financial disaster of some sort to ‘nudge’ us out of that state of helplessness. Don’t wait till that happens to you.
January is a great time to speak to someone about your finances. (And it doesn’t have to be us, although we are more than happy to help.) Pen down the areas of your finances you would like help with and go talk to a confidant; a trusted family member or friend, a colleague or better still a financial coach/planner to help you get started.
So go on, have a great year