It’s that wonderful time of the year again. The holiday food comas are subsiding, the final shreds of wrapping paper carnage have been thrown away, and there’s a palpable newness to the air. It’s crisp, it’s fresh, and it makes you feel alive! And then, if you’re like us, you look at your first bank account balance of 2016 and… oh. Wasn’t there another zero on the end of that balance? Did someone rob a zero from our bank account?!
It’s interesting being on the other side of a budgeting website and watching our stats ebb and flow throughout the year. The number of visitors and budgeting-related searches begin tapering off in October and November, hitting rock bottom by December. And then suddenly, our traffic doubles and triples almost overnight as the new year arrives! We always knew there were probably others out there, like us, who used the new year as an annual chance to correct financial course and fix our budgeting woes. And now with our stats to back it up, we know you’re out there — welcome! We’re so glad you’re here.
So if you find yourself looking for ways to make your 2016 financial goals a reality, let’s chat about how to git ‘er done.
1. Figure out the “why”
I’m not sure why or how we latched onto this idea last year, but 2015 was definitely the year of the “why” in our household. The reason behind the reason we do everything that we do. So you want to save more in 2016? Great. But why? So that you can afford to get out of debt. Okay, but why? Because you hate being handcuffed to a nameless, faceless entity and would rather save that money for yourself/your child’s education/your sick mom or dad/a cause you care about. Now we’re talking!
Instead of rehashing it all here, you can read all about getting to your why here. But the “to long; didn’t read” version is this: “In the ‘good, better, best’ paradigm, good is at least attempting, but ultimately losing sight of a goal. Better is succeeding at a goal, but without much rationale besides ‘it’s what I’m supposed to do.’ And best is having a motivation and vision so clear and so real that you can’t stop yourself from working toward that goal every day of your life.” So put some meat on your 2016 goals so that you can’t imagine your life WITHOUT accomplishing your financial goals.
2. Research the “how”
One of our stretch goals for 2016 is to hike Havasupai. From every photo we’ve ever seen, it looks like an absolutely magical place. So we throw it on our list and now we’re good to go. And so in a fake alternate future reality, we decide to make a weekend trip to Havasupai. When we arrive, we come to realize that we needed to make a reservation months in advance to obtain a permit. Whoops. But we sneak in anyway, kids in tow, only to realize that our “this will be a fun little day-hike” assumptions were wildly wrong and two miles into the scorching, difficult hike we are plucked off the ground by circling vultures to put us out of our misery. The end.
That’s a dark beginning to 2016, but hopefully the message is clear: a goal isn’t much of a goal without having an idea of how you’re going to make it happen. It seems unlikely that you’re going to suddenly start budgeting in 2016 if you don’t actually know what a budget is, right?
While we don’t pretend to know everything (or anything) about personal finance, we have put together a few articles and resources over the years that might line up with your 2016 financial goals. So if you find any of your goals in the list below, have a read. Otherwise, hop on Google, search for your goal, and get yourself some learnings.
- Spend less
- Save more
- Start saving for retirement
- Prepare for a baby
3. Make it actionable; hold yourself accountable
Last but not least, make less goals and more to-do items. Goals tend to be vague and broad and easy to worm your way out of. To-do items include a clear task, desired outcome, and deadline. Be as specific as possible, and then hold yourself accountable by setting a due date. Better yet, figure out what you want to accomplish by the end of the year, and then reverse engineer that goal with deadlines 1-week, 1-month, 3-months, and 6-months from today.
Let’s say you want to get life insurance in 2016 (which might be a great goal to add to your list if it isn’t already). So let’s make it more actionable: obtain adequate life insurance for me and my spouse while finding a way to cover the costs of our premium in our current budget. That’s a goal with some teeth! Now let’s set short-term to-do items to make that desired outcome a reality.
- One week — Read through OFB’s Guide to Life Insurance for Millennials and calculate how much coverage is needed for my policy.
- One month — Research available coverage, carriers, and premiums and pull the trigger on my policy.
- Three months — Complete medical exam, finalize policy, and find areas in budget to cut back to afford new monthly cost.
- Six months — Quick review of OFB Guide, calculate coverage for spouse and find policy.
- One year — Policies are in place, premiums are budgeted, and coverage is adequate for current life stage.
How do you eat an elephant? One actionable, clearly defined bite at a gradually-increased-interval-of-time.
And that’s all folks! We’d love to hear your financial goals for the new year. What big financial plan does 2016 have in store for you?