I hang out with the same friends every New Year's Eve and I know the topic of New Year's resolutions is going to come up. Given the sad state of my financial affairs everyone will be looking to me to make some sort of promise. Any advice?
Santa hasn't been gone more than a few minutes before Father Time shows up and warns us that the ball in Times Square is about to drop. That means we had better fill up our champagne flute and pop a pre-smooch breath mint before the confetti cannon fires.
You're supposed to kiss someone on New Year's Eve and you're supposed to come up with pithy resolutions to feel guilty about for the next 365 days, but I don't always do what I'm supposed to do. I haven't made a New Year's resolution since Salt-N-Pepa's "Push It" topped the charts in 1987. I don't make them for two reasons: First, having to follow through on a resolution feels like I'm being punished for something. Second, making resolutions has never delivered the results I wanted in the past, so why would I continue to do it?
But goals, I love goals. And every year about this time I dream a bit about what I really want to have or experience in the next 12 months. I recommend that you shift the conversation around the dinner table from resolutions to goals. Or politely decline to answer and go through this process on your own time, without Anderson Cooper and Ryan Seacrest barking away in the background.
Get closure on the year that was
Take some time to wrap up the year you've just finished. What did you accomplish? What didn't you accomplish? What was your high point? What was your low? What do you want to celebrate? Or what would you like to forget? When it comes to your financial situation, what worked this year and what didn't?
Be generous with your self-assessment. Depending on your circumstances, your accomplishment list might lead with "Demonstrated great restraint and did not smack anyone." I include all sorts of things when I debrief my year-items large and small. In 2012, I landed a TV production deal, completed a year-long writing MoneySense blog, paid off a big debt, and took a gymnastics class with my three-year-old. You can include whatever you want to get closure on the year.
Think holistically about the year ahead
What do you really want for 2013? What are your goals? And I do mean goals, not guilt-laden resolutions.
Most people I know have a lot going on in life. Yet, often the financial industry focuses on a really narrow set of goals, like retirement and debt reduction. When it comes to money what I think really motivates people is having a broad set of goals that cover a bunch of different areas, like family, career, health, home, and experiences. Many of the goals that you'll create in these areas have a financial component, hence this column.
What are some goals that you have in the areas of life that are important to you? Again, they can be large or small. I had one recent workshop participant who said her biggest goal for the coming year was a full night's sleep once a week. Fantastic.
What do you want? Choose two to three things that are really important to you and then write your goals down. It is way easier to stay motivated and focused on your goals if they are written down somewhere.
Do a gut check
You are more likely to achieve a goal that you're passionate about. Review what you've written down and ask yourself if you're inspired by them. Are there a few outrageous ones in there? Are there a few that you know you'll be able to accomplish readily? If you focused on these things in 2013, would it be a great year for you?
Talk about your goals
I am a big fan of sharing goals with people in your life. Engaging your community will provide support when you need it, ideas on how to get what you want, and a level of accountability that will increase the likelihood of you following through. It is also a huge contribution to your friends and family because now they'll have someone they can talk about their goals with.
Remind yourself to review goals
Set a reminder in your Outlook or printed calendar to look at that piece of paper every three months. You might not actively work on most of your goals, but you'll be surprised how much gets accomplished just because you wrote them down and reviewed them once a quarter. And when it comes time to review your goals, remember that you made it all up in the first place. You can take goals off the list or add new ones as the year progresses.
Have New Year's Eve be the foundation for a great year for you and for your financial health. Determine what you really want, develop a plan, and then go out and get it. Good luck.