By Brett Walters, CFP®, TBH Advisors
At the beginning of a new year, many of us set resolutions with great intentions. Some opt to exercise more, while others focus on developing healthy eating habits or even learning a new skill. Oftentimes, we start with a burst of enthusiasm, only for our goals to fade away in the hustle and bustle of life.
Much like the goal to get in shape, a commitment to financial health requires a sustained, habitual approach to see results. At TBH Advisors, our clients’ financial health is top of mind as we work together to ensure they are well-positioned to meet their needs and achieve their financial goals. Below, I outlined how to turn your New Year’s financial resolution into a routine in 2024 and beyond.
Before setting a specific financial resolution, take a snapshot of your financial situation. Assess your income, expenses, savings, and debt. This overview helps you identify areas for improvement. After doing so, determine a resolution that is realistic and achievable.
Start by categorizing your expenses into fixed necessities, such as utilities, living expenses, and groceries, and discretionary spending, like entertainment, dining out, and travel. Also, look into your savings – do you have enough for emergencies? How are your long-term savings shaping up? This initial assessment sets the stage for specific, meaningful resolutions.
Once you’ve determined a financial resolution, it’s crucial to set up regular financial check-ins. Determine the best cadence for these meetings – whether it’s with yourself, your spouse, a partner, or even a friend who shares similar goals. Hold yourself and others accountable for these regular check-ins by setting calendar invites and reminders. Make these check-ins mandatory, and hard to ignore or cancel!
Whether it’s monthly or quarterly, these meetings are your opportunity to reassess and ensure you are set up for success. Remember, managing your financial well-being is a lifelong pursuit, not just a yearly ritual.
In addition to calendar reminders and shared accountability, tools and software like YNAB (You Need A Budget) or Tiller can simplify budgeting and financial tracking. Some of these platforms may come at a cost, but there are free options as well that can be a helpful tool to make the process less daunting. These systems can categorize your spending, making check-ins more about reviewing progress rather than getting bogged down in the details.
Automating savings to retirement accounts, brokerages, or savings accounts, where feasible, can also be a game-changer. If the money never hits your main spending account, it reduces the temptation to spend it. This “out of sight out of mind” approach is a simple yet effective hack to ensure you’re consistently contributing a set amount to your financial goals.
This year, view your financial resolution as a habit, part of your normal day-to-day life. Consider it a regular practice rather than a one-time annual event. Your financial health, like physical fitness, doesn’t transform overnight. It’s a gradual process that involves building new habits and consistently incorporating them into your life. Your financial situation and goals change, and a yearly glance is not enough to provide an accurate snapshot of your financial health.
It’s common to deviate from a financial resolution. If you fall off track, don’t get discouraged! However, if you do, simply pick up where you left off. Setbacks are merely bumps in the road and part of the journey to your end goal of financial wellness. The ultimate goal of a financial resolution is to turn it into a lifelong habit.
As we embark on another year, remember that financial well-being is about consistency. Are you looking to improve your financial health in 2024? Contact TBH Advisors to discuss how we can support your financial goals this year and beyond.
At TBH, your financial goals are our top priority. Contact us to schedule a free consultation and see how we can help you achieve them.