It’s the New Year and intentions are high.
Did you know that almost 50% of Americans make resolutions annually? But for all the good intentions, only a fraction of us keep our resolutions; University of Scranton research suggests that just 8% of people achieve their New Year’s goals.
Why? You can ‘blame it on the brain’ according to this WSJ article; neuroscience research suggests spreading resolutions out over time is the best approach because we don’t cope well when everything changes at once.
So how can we narrow the gap between good intentions and real results?
I recommend doing just one thing this year. You heard me right…one thing.
Go ahead and make a big, long list and then determine the single-most important item on that list.
Next, focus exclusively on that single-most important item and try to forget everything else. Research shows that decision-making is tiring. Decision fatigue can wear you down and knock you off track.
Now, I’m going to make a second recommendation to you: consider that your top priority be to create an intentional spending plan that works.
Note that I did not say ‘budget’ because for many, ‘budget’ implies shortages, self-denial and spousal conflict. It can be a real conversation stopper.
Instead, I am suggesting an intentional spending plan.
Unlike a budget, a spending plan is not what you can’t have. A spending plan allows you to direct your financial resources toward what you can have. A spending plan frees you to prepare for a major life change, make a big ticket purchase, implement important savings goals, or commit to what you love. It puts you in control of your economic values.
Here’s how you do it…
Begin by understanding all of your discretionary and lifestyle cash flow decisions. Next, start thinking about these purchases as decisions and steps in an intentional spending plan, rather than line items in a budget.
Finally, establish an effective cash flow tracking system. This is where even the best intentions break down so find a system that works for you, but be prepared to treat it as a high priority and give it enough time to become a habit.
A retirement spending plan is the linchpin that connects your retirement income resources with your cash flow needs. Knowing you can live comfortably within a range of outcomes will help you feel better about your retirement planning options.
For a practical guide on the spending plan approach, check out financial columnist Jane Bryant Quinn’s book, Making The Most of Your Money NOW.
Overwhelmed yet? Don’t be.
If all you get done this year is the most important thing on your list—whatever it is—won’t that be powerful?
You’ll be ready for a repeat next year.
Stay encouraged, keep focused, and let me know if you need any help.
