Moving forward in 2015
The key is to have the financial discipline and willpower to work on your goals.
AFTER the hustle bustle of the Christmas season, January 1, the first day of the New Year is the most opportune time to look back and review the significant events that transpired in the past year. Among the resolutions you made for year 2014, how many were actually achieved? Were you able to make some significant strides in your stated goals? How many of the remaining unrealized goals are still relevant and worth pursuing this year? More often than not, we find ourselves repeating the same resolutions year in, year out.
In 2007 a research designed to measure the success rate achieved by New Year resolutions was conducted by Richard Wiseman of the University of Bristol. The results showed that among 3,000 participants, 88 percent of those who set New Year resolutions failed despite a 52-percent confidence level that they will succeed in their goal. Furthermore, men achieved their goal with greater probability when they set measurable goals, while women succeeded 10 percent more when they proclaimed their goals in public and get support from their friends. Sharing your goal with someone else has the effect of creating accountability.
And so it seems that one of the plausible reasons for failure is that we are trying to work on too many resolutions. A more pragmatic approach is to choose three, and start working on the most critical goals in your long list of resolutions one at a time. We just have to accept the fact that we cannot get all of them done based on our historical experience. Oftentimes, we start to plan on the best case scenario (dream goal) but then in real life, there are a lot of unforeseen obstacles that causes the twist and turn in our fate. In some cases, people get discouraged and give up easily. The harsh reality is that life is never smooth.
Another reason is that a lot of people do not take the extra effort to write down their goals succinctly on paper and work on them just like successful businesses do in their annual planning sessions.
So let us take 30 minutes now to choose three important goals that you want to complete by the end of 2015.
- Put down in writing your SMART (specific, measurable, achievable, realistic, time bound) goals.
- Commit this to yourself and openly declare this to your close friends or colleagues who can give you the moral support.
- Strategize your action plan.
- Monitor periodically.
- Be flexible to change solutions when unexpected circumstances arises until you reach your goal.
- Once you have realized your first goal, cross it out of your list.
- Celebrate each small victories.
One of the most popular resolutions on New Year’s Day involves improving personal finances, such as saving money, reducing unnecessary expenses, making investments to grow wealth or getting out of debt.
Let us get started by conducting an inventory of our assets and liabilities to complete our SALN (Statement of Assets, Liability and Net Worth) as of December 31, 2014. To come up with your Net worth figure, simply list down the market value of your assets then deduct total liabilities. If you prepared your SALN last year, you can now make a comparative statement. How did you fare?
The next step is to review our financial goals. Changes in family situation such as expecting a new baby, family member who is suffering from critical illness or disability, a recent death in the family, your current lifestage, economic environment, level of income can affect your perspective in life and consequently your new year’s goals.
Were you able to track your monthly expenses for the whole year? If so, assess which items among your discretionary and nondiscretionary items you have overspent month on month (Kindly refer to previous article in this column, “Do you have a spending plan?”) and think of ways to control them. List down your sources of income too. Then we can start to realign our spending plan based on our new goals, ending financial position and changes in sources of income.
The key is to have the financial discipline and willpower to work on your goals. If you do not take conscious effort to monitor them, your goals will remain unfulfilled dreams and you have actually set yourself up for failure year after year.
At the end of the day, it is not really how much money we made in our lifetime but the application of our life’s values, principles and development of character that defines who we are. We are looking at creating a holistic balance in all aspects of our life—family, work, social, spiritual and financial life to help us reach the level of happiness we deserve. Let us remember that God is always here to mold us in accordance to His great plan for all of us. Money is not just a resource which we can use to provide for the needs and dreams of our family but also a tool to help others. Matthew 6:19-21 says that we should not store up treasures on earth, where moths and vermin destroy, and where thieves break in and steal. Our mind should be more focused on treasures in heaven. “For where your treasure is, there your heart will be also.”
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Arlyn Cheng is a Registered Financial Planner of RFP Philippines. She is a Financial Advisor of a leading insurance company in the Philippines.
Source: http://www.businessmirror.com.ph/moving-forward-in-2015/
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