The start of a new year feels refreshing, invigorating, and often times optimistic. It is a chance to begin again. We have a culture of creating “New Year’s Resolutions,” yet many of us find failure shortly into our attempts. Studies show that by February, 80% of New Year’s Resolutions have been abandoned.1 Don’t be disheartened! Below are our best tips on goal setting and creating a plan to stay on track. After all, we are a team of planners.
These principles apply to any kind of goal setting – as an example, we will use our friend Penny and her target of her dream home.
Allow yourself to want. Think big, small, or anything in between. Allow yourself to write an imperfect list and progressively narrow it down to your goal(s). Our friend Penny is dreaming big and wants to save for her ideal, forever home. Penny set her sights on saving $50,000 towards her goal this year.
Identify obstacles. Before you start, consider reflecting on any areas of weakness is a great way to eliminate or mitigate setbacks. Knowing what you are willing to drop to pay your future self helps you stay motivated. Penny took stock of her habits and realized she grabbed a spendy salad downstairs in her new office building several times a month and loves to pick up coffee from her neighborhood coffee hut. With her goal in mind, Penny decided to pack her lunch and treated herself to a coffee just once a week. Like Penny, try setting your intentions to be process-oriented, not goal-oriented.
Incremental changes create big outcomes. The best way to form new habits is to make the steps small and repeatable. Penny was intentional about setting up her daily, monthly, and quarterly steps to be process oriented.
- Daily, she reminds herself of her dream home every morning. She wrote it down on a sticky note and put it on her mirror so every day it is top of mind.
- Bimonthly, she set up an auto-transfer so that 5% of her paycheck goes to her savings account.
- Quarterly, she pledged 50% of her bonuses or extra monies to savings. She acknowledges her shortfalls and understands that she will want to treat herself to some of the extras.
By setting the goal to be attainable – bite sized – you will slowly build your confidence in achieving the goal and maintaining the habit.
Dust off setbacks and celebrate wins. Penny had a streak of setbacks – she forgot about needing new tires this year, her tax bill increased, and her healthcare expenses went up. Penny realized she needs to add a little more cushion to her emergency savings for unexpected events. Planning ahead to re-evaluate your goal (before something unforeseen happens) helps alleviate the feeling of failure. Having to hit reset doesn’t mean you have to give up altogether. After her reset, Penny got back on track with her new goal and rewarded herself with her favorite dessert at her favorite restaurant.
Penny finished the year with $45,000 which was just below her original target and well on her way to her dream home. With her successful experiment on goal setting, she’s excitedly planning for 2025 and beyond.
At Alaska Wealth Advisors, we put primary focus on our client’s goals and habits through comprehensive financial planning. We help work through setting attainable goals and establishing strategies to meet them. We work in teams to identify obstacles. We partner with our clients when setbacks happen to bring them back on track. And, most importantly, we celebrate their wins.
What goals can our team help you with?
Nicole “Nikki” Squires
Associate Financial Advisor
- Elaine K. Howley “Why Most New Year’s Resolutions Fail”, U.S.News, December 22, 2023
Alaska Wealth Advisors, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Alaska Wealth Advisors’ investment advisory services can be found in its Form ADV Part 2 and/or Form CRS, both of which are available upon request. Material presented has been derived from sources considered to be reliable, but accuracy and completeness cannot be guaranteed.
