New Year Resolutions
This is the time that many people reflect on the coming year and make New Year Resolutions. I also have been a serial maker of resolutions with mixed results. I noticed that some resolutions were successful, while others failed. Lack of motivation or frustration often sabotages the resolution, but the wish continues as it is deferred from year to year. The process is not empowering, but the reason is crystal-clear.
As with all successes and failures in life, the difference is between a wish-list and a plan. Certain goals fall into the category of wishes but are very difficult to do. Examples include losing weight, getting into physical shape, getting organized or improving relationships. They tend to be vague, unrealistic or poorly defined. However, where the motivation is powerful and urgent, or motivated by pain and need, the carefully defined resolution must have a plan for success.
As financial planners, we deal with this process successfully by carefully defining the need, creating a goal, establishing a time horizon with regular milestones, and reviews for accountability. Most importantly, the plan must be in writing. I remember that in my first week of law school, my contracts professor said that "an oral contract is not worth the paper it’s written on." Likewise, oral resolutions are wishes - not plans.
Goal-setting must be specific, realistic, and clearly defined. Worthwhile goals are difficult and should be broken down into small pieces with short time horizons that are easy to achieve. Every success should be celebrated when it is achieved. Instead of minimizing each accomplishment by observing how far away the goal remains, pat yourself on the back because you did it and you are one step closer to your goal. Create a time-line and write down your first accomplishment. Tape it to a wall and add to it regularly. Ignore all naysayers and thank all supporters. You deserve it!
As you progress, expect to encounter many obstacles. Think about the possibilities in advance to minimize the surprises. Scheduling regular reviews will allow small adjustments to get back on track. Understanding your weaknesses that caused past failures and being flexible may help to tailor plans to your lifestyle. Seeking perfection often sabotages success. For example, if your goal is to lose weight and you don’t plan for gaining weight during a vacation, it could cause you to get frustrated and just give up. However, if you accept that gaining some weight and having fun is normal you still have a positive attitude knowing that in a couple weeks you will be ready to move forward again.
Saving enough money for retirement may be the hardest goal. It takes a huge commitment over several decades and involves overcoming many obstacles, both foreseen and unforeseen. In comparison, learning to play the piano, losing weight, quitting smoking, or getting into shape are easy. The process is the same. Both involve creating a plan and getting started. Think about Nike and “just do it”!
Resolutions with reasonable expectations are worthwhile. Wish-lists, not matched with a strong desire, are a waste of time. Over a lifetime, one annual resolution, taken seriously, will result in many happy celebrations.
Marv Kaye, J.D., CFP® | Kaye Capital Management