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Should I make a Financial New Year’s Resolution?

January 06, 2022
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Happy New Year!  You may have noticed it’s been a few months since our last blog post.  I have missed writing to all of you during this break, but we have been hard at work here at the firm putting the finishing touches on a brand-new, updated website (which you can check out at the same site address, www.resolutewm.com).  We are all excited to share this new site with you, as well as some of the updated features we will have in 2022.  We now have an events page, which will have a calendar of the events the firm is holding in the Greater Dayton area as well as information on how to meet up with us in the public.  Our blog site is still the same, but has a section dedicated to it as well.  It is now easier than ever to contact us to schedule a meeting, ask a question, or just send a message to say hello! 

New Year’s Resolutions

New Year’s Resolutions have been around a long time, and I’m sure almost everyone has made one at some point during their lives.  Whether it is to go to the gym more, kick the smoking habit, cut out soda, be more productive at work, the new year always seems to be a great point to kick off making changes to your personal lives.  It’s a chance to wipe the slate clean and start fresh with a new calendar.  A very popular topic area for New Year’s Resolutions are financial resolutions.  What are the most popular ones?  Why do most resolutions fail?  Should I bother? 

Popular Financial Resolutions

There are quite a few popular New Year’s Resolutions that people make concerning their finances, and most of the time, they aren’t much different from problem areas they see throughout the year.  A popular one is to control their excess spending.  These sound like “I will eat out less” or “I will cut back on my streaming subscriptions.”  I’d classify these as budgeting resolutions.  Another popular resolution is to save more, whether that takes the form of money in a savings account or an investment account. 

Why Do Resolutions Fail?

These popular resolutions are typically chalked up as “lifestyle” changes.  They seem so small, and so easy to do.  So, why is it that by the end of February, it always seems that we are back to the same things we always do before!  It has to do with how we make changes as people.  New Year’s Resolutions are not planned.  They aren’t goals with structure.  “I’m going to go to the gym 3 times a week” is not specific.  You can’t measure the goal’s progress outside of showing up to the gym.  There is no built-in, actionable activity in it.  If you want a resolution to be successful, it has to have certain qualities.  It should be specific, measurable, achievable, relevant, and time-based.  When I work with clients who want to make changes to how they work with money, we focus a lot on creating small, specific goals that help them take steps toward where the bigger picture is for them.  It’s so much easier to take 10 steps forward than it is to walk a mile, but all walking a mile requires is for someone to take 10 steps forward, over and over again!

Should I Bother Making a Resolution?

Absolutely!  But it doesn’t have to be a New Year’s Resolution.  You can start working toward a resolution anytime during the year.  Let’s take a young couple with a tight budget as an example of how well this can work.  John and Sally are both 30 years old with two young children, and they are really strapped for two very key resources, money and time!  Everything they earn is spent on their current lifestyle.  It seems like the second they get a paycheck, it’s gone toward the house, bills, child care, or anything else they do.  They save a little bit in their 401(k)’s, but just enough to get their match.  At the beginning of the New Year, John and Sally both agree that they want to save more money, but just don’t see how saving an extra $100 per month will matter to them, which is the most they would be able to save right now.  If they chose to put $100 in a retirement account every month and assuming they earned a modest compounded return of 7% per year, when they turned 65 they would be surprised to discover that that little bit of extra saving meant they would have an extra $180,000 for their retirement!

Thanks for taking the time to read the blog this week!  I would love the opportunity to sit down and discuss how I can help you improve your financial picture and reach your goals.  I specialize in creating focused, interactive plans for clients building wealth for retirement as well as managing those retirement plans to make sure my clients enjoy their retirement years to the fullest.  I also work with a variety of other financial issues!  If you would like to schedule a free consultation, please call the office at the number below, or click the link to schedule a virtual or in-person meeting (or phone call) by setting a time that works for you!  I would love to hear from you!  Enjoy the rest of your week!

Best wishes,

Mitch Bodenmiller

(937) 424-3269

To Schedule a Meeting: Visit my Calendar and set a time!

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