As a Money4Life Budgeting Coach, I see customers struggle daily with reaching their goals and sticking to their New Year’s Resolutions, financial and otherwise. There is hope, however, if you work to make your goals specific and measurable, if you plan ahead, and if you make sure you have the proper tools to execute your plan.
The most common mistake I have seen is making a goal but not putting a plan in place, or finding the proper tool to help you accomplish the goal. You can say that your goal is to save more or pay off your debt but unless you put a plan into place and find a tool that will help you track your progress, you probably won’t be able to accomplish that goal. Having a balanced spending plan, based on the principles of envelope budgeting, and a tracking tool that will help you check your progress is critical to reaching your goal.
Another challenge is not being specific enough when setting goals or resolutions. “Save more” is arbitrary and vague; whereas “save 10% of my income” is specific and can be measured. It is a specific amount and you can easily see if you are making progress and meeting your goal. When creating your spending plan you can allocate 10% of your income into your savings envelope. If at the end of the month your savings envelope hasn’t increased by 10% of your income, you know that you have not met your goal and have spent that money in ways contrary to that goal. If this happens, reevaluate your plan and look for ways to reduce spending in other areas.
The other mistake that I often see is not setting benchmarks. It’s important to have set time frames where you measure your progress and look for ways to improve if you have fallen short, and hopefully celebrate your wins as well. Check your progress in regular intervals, whether that be monthly or quarterly.
If you are able to overcome these challenges, you should be able to make meaningful progress on your New Year’s Resolution this year. Get started now and make 2013 the best year yet!