I applaud you if these are your goals, however, how are you going to know whether you have succeeded or not? Without a tangible financial goal you are doomed to failure.
More tangible versions of the same goals might be:
The balance in my TFSA on Dec 31 2019 will be 10% larger than on January 1 2019. This is very specific, you can even put actual values in there, which makes things easier for you to monitor your goal.
Remember if you are saving for your kids’ educations an RESP goal of $2500 added to the account would be good.
RDSP contributions for your child need to be there as well.
My mortgage principal will be $10,000 lower at the end of this year. The important thing is to set a tangible financial goal. How you do it is left open, but what the goal is, is concrete.
You can automate this goal, and make it easier. Setting up automatic over payments on your on-line banking of $400 per pay (if you are paid bi-weekly) makes this resolution real.
I will lose 60 pounds this year by going to the gym at least 150 times. Ideally I will try to lose 5 pounds a month. Again, this is very concrete, and easily monitored.
In my case I am lucky as my office has a gym I can use for free.
Resolutions are wonderful things (although you can set goals any day of the year), but they must be specific. Saying, “I will be a better person” is admirable sentiment, but what does it mean and how are you going to do this?
Every year, many folks try hard to break old habits, lose weight, or fix a “problem” in their lives, and they wait until January 1st to start this, but I have found that as soon as I call something a “New Year Resolution” it is doomed to failure. The pressure of calling anything a New Year Resolution, ensures that I worry far too much about it, and will eventually give up on this.
The University of Scranton put out some very interesting numbers on New Year’s Resolutions (in the U.S.) and how long the attempted change continues, the telling stats (especially for old farts like me):
Age Success Rates
Percent of people in their twenties who achieve their resolution each year
Percent of people over 50 who achieve their resolution each year
So people my age who try to make a change have a 14% success rate? Wow, it is really hard to teach us old dogs new tricks, but, if you don’t call it a Resolution, maybe you can trick yourself into a higher success rate.
Kerry from Squawkfox was doing an exposé and asked me for three quick financial rules of thumb to live by (well I think she asked me, rules of thumb that I live by, but those are useless given my financial situation, so I decided to give her a better answer). Remember that everyone should have their own way to deal with their financial situation, but it’s always good to start with a couple of simple rules and then figure out what really works for you.
What were these nuggets of Financial Wisdom that I passed on?
Annual income twenty pounds, annual expenditure nineteen six, result happiness.
Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery. Charles Dickens, David Copperfield, 1849
Never confuse spending less with saving money, you cannot add by subtracting financially. Don’t get me wrong spending less for something is a goal, but you aren’t saving money, you are spending it, you are just spending less of it. Save by not spending in the first place.
Lifestyle creep is dangerous, and never an excuse to build up debt. You don’t “deserve” those nice things necessarily, never go into debt for something you want, and figure out the difference between what you WANT and what you NEED (and stick to that).
Yes, I have written these things before (note the links to the earlier posts about those exact topics), but sometimes it is worth chewing your cud in the name of financial literacy.
I have previously railed against the concept of the Bucket List with Buck the Fucket list. Someone on the web brought up the concept of the Anti-Bucket list. A list of things that you never want to do. I can wrap my mind around this idea, as due to my paranoid nature, I have a long list of things I never want to do (e.g. Pick a fight with Mike Tyson) or a financial anti-bucket list.
What things financially do I never want to do (or ever do again)? I will try to keep this list shorter and hope you all will join in with comments.
The Anti-Bucket List
Declare bankruptcy, no matter what anyone says about how there is less stigma around declaring bankruptcy, I don’t ever want to do it.
Get a Pay Day Loan, yes, I am still harping on that one as well. If I reach the point where I need this service, I am not sure what happened to me, but I will be very unhappy. I won’t have a point for get a loan from a Loan Shark. Assume this is the same entry on the list.
Buy a new car that cost more than my first house, I don’t care how many hot women will throw themselves at me because of my phenomenal vehicle (because they assume I am rich), I view a vehicle as a means of transit only (although the bus I took for a while cost twice as much as my first house).
Collect unemployment insurance, I am not sure this is genuinely on the list. I was unemployed for a year, and was never “eligible” to collect it. I suspect I never will collect EI, just by default.
Get a reverse mortgage. I just can’t see how this would be a good idea either.
Are there other things we should be adding to the Financial Anti-Bucket list?
When I was a young man, sometimes I would end up being a “wing man” for one of my friends when they went out to the bar. My duties were simple, help my friend find the girl of his dreams (or was it the girl of the night?) and then once “true love” was in bloom, I would disappear (some might say like a fart in the wind).
This got me wondering, why aren’t there any financial wing men out there? Are there financial planners who think they are financial wing men? Any bankers, or stock brokers who help out and then just disappear?
I don’t think that is the way things work in the financial world, no one simply helps out, knows their job, gets it done, and then walks away knowing they helped get things done.
My guess is a few of the financial bloggers that I read religiously are actually good financial wing men (or wing women), but I have yet to meet someone in the financial industry who made me think they knew their job and I was confident they were going to do what was needed.
Am I missing something, are their financial wing men out there that you have met?