4 Ways to Refocus your Financial Resolutions
By, Emma Pautler
Now a few weeks into 2021, the hope and excitement of putting 2020 behind us has started to fade. "This year will be different" is turning again into "how do I survive this?" Fitness and finance are the two most common resolution topics. Don't worry, I'm not going to remind you of how quickly your goal to run one mile per day died on the first 25-degree morning, but I will encourage you to refocus on your financial goals for 2021. Here are a few tips to keep/rebuild the momentum.
1. AUTOMATE YOUR SAVINGS
Automation works. Your streaming subscription is automated. Your morning routine is automated. The route you take home is automated. It takes some time to get up and running, but automation works really well when trying to save. The goal is to save first, then have your spending fit into the remainder, rather than the full amount. It's the "use a smaller dinner plate method" for personal finance. Simple, but not easy. Automation helps make it easier.
2. BUMP UP YOUR RETIREMENT CONTRIBUTIONS
Early in the new year is a great time to bump up your 401k/403b contribution percentage through work. Did you know that putting away an extra 1% of your salary to your 401k may not even be felt, but it could make a big difference in the end? For example, for someone making $60,000 a year, a 1% increase in pre-tax contributions will only decrease one's paycheck by $17.30/pay (assuming 25% tax rate and 26 pay periods/year). Bump it up a notch, you’ll thank yourself later.
3. DON'T BUY ONLINE AFTER 9
Online retailers are in the business of reducing resistence. How can they make the experience seamless from phone to doorstep? How did they know I was thinking about that item? I didn't even search it. Regardless of how they know what we want, they do. They also know that my guard is down after a long day. Ever notice the TV ads are different in the evening than in the morning, and that infomercials mostly play at night? Hmm. Personally, I have a rule that I don't buy anything online after 9pm. This helps prevent against making purchases I'll regret. I put it in the cart or wish list for tomorrow. Something essential like toothpaste, toilet paper, doesn't matter. Don't buy online after 9.
4. "I'M A SAVER"
We often have a script in our heads that we think defines us. "I'm a spender." "I always fall back into debt" "I always splurge over the holidays and then regret it in January" "I never follow through on my resolutions." We will find ways to justify our behavior by using this script. Sometimes something as simple as rewriting that script to "I'm a saver" or "I make good financial decisions" or " I'm not the type of person who impulse spends" can be effective. Careful though, the first time you fail, your other script will reappear. "See, you are still a saver" It takes time to prove to yourself that you've turned a corner.
Hoping 2021 proves to be your best year yet! For more articles, calculators, or to get in touch, check out www.precisionwealthpartners.com.
About the Author
Paul M. Mitchell is a registered representative of and offers securities and investment advisory services through MML Investors Services, LLC. Member SIPC. Precision Wealth Partners is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. His office is located at 2 Bala Plaza, Suite 901, Bala Cynwyd, PA 19004 . You can reach Paul at 610-766-3000. CRN202301-276947.