Resolutions vs. Financial Life Goals

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 Chris Arnold By: Chris Arnold

The holidays have passed, kids are back in school and you’re starting to get back into a routine. If you are like most individuals, you have allocated your top goals for the year into “resolutions” around topics such as health, productivity, finance and family.

Unfortunately, 50 to 80 percent of Americans fall off their paths to resolutions—often because the goals were too lofty, generic or immeasurable. So this year, why not focus on developing financial life goals instead of, or in addition to, your more general resolutions?

Here are three simple, yet practical, steps to kick-start your new year down the right path.

1. Reflect on your financial wellness.

The holidays are a wonderful time to express gratitude and count the blessings you’ve received in the past year, including progress you’ve made toward achieving your financial life goals. Consider areas in which you exceeded your personal expectations, as well as areas you fell short of your objectives. For instance, were there unexpected sources of supplemental income or expenses that you didn’t anticipate? This exercise will help you identify ways you can better align expectations and experiences in 2017.

2. Evaluate your current situation based on life goals.

After self-reflecting, or completing a financial review with your spouse, another priority should be to evaluate your current situation based on your short and long-term objectives. Some common questions to help initiate this conversation include:

  • What life transitions took place over the past year? Are there any foreseeable transitions in the coming year?
  • Do our current savings habits have us on track to live the lifestyle we visualize throughout retirement?
  • Based on the rising cost of education, are our current savings adequate to support our children’s future education goals?
  • If an accident were to occur within the coming year, have we sought out solutions that will allow our family to continue living the lifestyle they have grown accustomed to? Are our beneficiary designations on retirement accounts and insurance policies up to date?

Although these are not the most enchanting conversations, by evaluating your current situation and proactively identifying solutions, you can alleviate these stressors from hindering your life throughout the remainder of the year.

3. Implement strategies to achieve your financial life goals.

Now that you are mindful of certain aspects of your finances you wish to improve upon, what steps need to be taken to get you on that path? How can you continue to thrive with your current strong suits? For example, you may decide to increase your savings rate by the same percentage as your raise, defer your year-end bonus into an education savings account or create a new budgeting system.

Developing new habits requires a great amount of self-discipline. However, by making gradual lifestyle changes, you can begin to engrain these prudent habits for a prosperous future. If you wish to discuss any of these topics further, your financial advisor would be happy to hear out your desires and provide recommendations on the optimal strategy to achieving your objectives.

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Chris joined Plancorp in 2016 after completing internships with two regional banks, General Electric Finance Department and Edward Jones. A native of Louisville, Kentucky, he graduated from the University of Kentucky in 2016 with a degree in Finance and Communications. More »