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It has been a practice to identify and write up a new year’s resolutions or two. The reason being is that we want to improve ourselves somehow and be better for the new year. However, oftentimes if not many times we failed to achieve our resolutions. True we might be dedicated in the first few months, yet our motivation level and even our will power will start to spiral down in the later months of the year. Then when a new year is about to dawn again, we make the same old resolutions only to fail again. This holds true with regards to our finances.
While there is nothing wrong with creating new year’s resolutions, what is wrong is not being able to do it. That is why, many of us don’t create resolutions anymore. It is like creating promises that you know you won’t be able to keep. That should not be the case. As a matter of fact resolutions are relatively easy to achieve.
Perhaps you might ask, why do you always fail then? It all boils down to creating the financial resolutions in the first place.
So before you cement your financial resolutions for the year, it would be best to identify if these resolutions are SMART.
SMART = Specific, Measurable, Attainable, Realistic and Time Bound
S (Specific) – When creating financial resolutions for 2016, don’t start vaguely or too general resolutions that we keep on hearing over and over again. This time, be specific and even insert figures in your resolutions. For instance, do not just write to be able to save this year. Instead, identify how much you would like to save for the year. Make it specific like I want to be able to save 50,000 for 2016. Same thing with your other resolutions like getting out of debt, creating an emergency fund, getting insured and more.
M (Measurable) – Here is also a reason why we always fell short with our financial resolutions. We failed to track our progress. As much as possible, have a gauge on how to measure and how you can hit the target as little as possible. Let’s go back to the previous example. Let us say you would like to save 50,000 for 2016. Divide this with your bi-monthly pay. Hence, every 15th and 30th, you are required to put up 2,083.33 to guarantee that you can be able to save that much by the end of the year. And start hitting those little goals that can contribute to hitting your ultimate goal.
A (Attainable) – Willpower and goal setting can go a long way in order to keep your financial resolutions. As much as possible, it must be you who believe first that the goal is possible. There are many successful individual who started with a goal in mind. As what a quote said, what the mind can conceive, the body can achieve.
R (Realistic) – Regardless of how attainable a resolution is, what will keep it grounded is the notion if it is realistic. You must be able to examine your financial healthy in the first place and if such can aid in making your resolutions come true. Going back to our example of saving 50,000 for 2016, you are required to put up 2,083.33 every 15th and 30th. That is around 4,166.67 a month. However, if you are still a student you can’t be able to do such especially if your daily allowance is 100. You would be getting 3,000 a month and you still have other expenses. This would make hitting your resolution harder. That is why, it would be best to have a conservative amount in the first place that you know you can be able to hit.
T (Time Bound) – Time is crucial in realizing our financial resolutions. This must be present so you can be able to have that sense of urgency. Do you still remember how you panic and cringe on deadlines? Same thing with our resolutions! It will make you double your time and effort especially if the deadline is near.
See? Making financial resolutions and hitting it one by one is easy. Only if you know how to create it well using the SMART method. With this process, you can be certain that you would be able to realize your goals for 2016. So go on and make SMART resolutions today.
P.S To those doing the 52 Week Money Challenge, it is Week 1 already! Did you deposit the next amount yet?
P.P.S Want to know more about investing, savings, stock market and more, check out my reference here. You can download free ebooks and resources too.
P.P.P.S I am also sharing my stock market secrets and information via these resources.