A New Year’s resolution is a commitment that an individual makes to a project or the reforming of a habit, often a lifestyle change that is generally interpreted as advantageous. (Wikipedia) See the words in italics. It all sounds pretty formidable and somewhat negative. Reform my habits and change my lifestyle!? The magnitude of that gives grave pause before embarking on that course of action. The low success statistics associated with resolution fulfillment confirm that we don’t react well to negatively-oriented, major changes in our lives.
Consider, for example, the health benefits associated with quitting cigarette smoking. Only a minority of those who try to quit are successful when based on the negative motivation of avoiding disease. But the odds of success go up dramatically when the focus, instead, becomes a positive goal. Decades ago, when the adverse health effects of cigarettes became part of our national consciousness, I decided to quit smoking. Like Mark Twain, I was able to quit many times but for only a few days, and I eventually recognized that I was acting on the wrong motivation and imagery. The specter of future diseases paled in comparison to the current pain of withdrawal symptoms – and they are very real. It was only when I switched to positive motivation that I successfully and permanently quit cigarettes. I saw myself playing with my small children without becoming tired. I saw myself attending their weddings and their children’s school graduations. I saw myself physically fit. I felt empowered to overcome the current pain for that visualized gain. So, we can’t move away from habits, but we do inexorably gravitate toward the benefits associated with positive change. Goals work and resolutions do not.
We can carry this on to diet, family relationships and other areas of our life. But to the point of this column, let’s look to our finances where we may forsake resolutions and instead set goals for ourselves that are positive in nature and thusly motivating rather than inhibiting.
|I will stop wasting money in my expenditures.||I will accumulate meaningful assets and become financially independent.|
|I will contribute more to my 401K plan.||I will retire comfortably, securely and with dignity and lifestyle flexibility.|
|I will save more for my children’s education.||My children will have options when it comes to post-secondary education.|
It is not just wordplay. The reframing from painful and disruptive change to positive expectations allows for an opening up of possibility thinking. It acknowledges our natural human tendency toward the positive and acts as a powerful motivator. (Politicians might benefit from utilizing this concept when urging us to painful and disruptive action.)
Now what are your goals? And what are your financial goals? Develop them clearly in your mind as positive achievements. The most commonly shared goals are education of children and retirement security, in that order. But there are as many goals as there are people and often more, as many of us have several life goals. Some wish to change careers in mid- or later life. Others wish to write the great American novel, start a business or see the world. All are valid, but until you treat them as attainable goals, complete with action steps toward achievement, it is simply wishful thinking. So, first settle on your life’s goals. Adopt them in concert with your spouse or life partner. Then set them up as the end result of your concrete efforts. That goal attraction will pull you through the short term pain associated with change and reformed actions and toward that sense of self in possession of your desired state of being.
The next step is to quantify them into concrete objectives that can be achieved in bite-sized portions. Work with your financial advisor to create evaluative schedules and investment management strategies that will demonstrate the achievement of those life goals as actionable steps that define an amount to save, a time frame and the portfolio structure geared toward your unique goals and risk tolerance level. Note how none of these concrete steps will seem passionately motivating. This becomes meaningful to you only when connected to the goals into which you have passionately invested yourself and made real in your mind with a desire to achieve. Only then will you willingly change the behaviors and take the positive steps toward the achievement of your unique goals. You will be surprised that it likely will cause little or no pain.
So this January, skip the resolutions and create the goals and imagery that put you in possession of the life that you want. Your actions will naturally follow. Then get with your financial advisor to create the schedules, outline the action steps and structure your personal, retirement plan and education funding portfolios to conform. As the ancient admonition goes, If not now, when? Today is the first day of the rest of your life. Make it the life you envision.