New Year, New Money Management
A post from our Partners at the UF/IFAS Extension Office for Hernando County
Scott E. Taylor
Family and Consumer Science Agent
As we begin the New Year, now is a good time to renew our focus on managing our money. It is a pretty good bet that 2021 will look much different than 2020, so now is a good time to make financial resolutions to prepare for the year.
Make a plan, and make sure that plan has vision. Whether you are planning to reduce debt, or save more towards retirement, write it down. When we write things down, they become real. We can post it on the refrigerator, on the mirror, maybe to your computer screen, but somewhere you will see it and be reminded of your goal. Make sure your goal is SMART. By that I mean Specific, Measurable, Attainable, Realistic, and Timely.
Next, focus on one or two important goals and develop the plan to accomplish them. With the unexpectedness of 2020, there are probably several areas of our money situation that could benefit from specific attention. Because we are looking for long term beneficial change, we want to narrow our focus to those goals that can make that a reality.
While we want to focus on goal success, we also must allow ourselves small rewards along the way. All sacrifice and no reward is the recipe for failure. Plan success reviews every so often and, when accomplished, give yourself a small celebration for your hard work. Maybe you get a credit card paid off and you take the family to dinner to mark the occasion. These “atta boys” help keep everyone motivated towards the end goal of better financial stability.
Another way to help improve the chances of success is to use the buddy system. Knowing someone is there to provide that helping hand (or foot as the case may be), is critical to staying focused on the goal. Accountability partners can be your spouse or other family members, or someone who may be trying to accomplish similar goals in their life. Accountability partners can also be more formal, such as a financial planner or retirement specialist, depending on your situation.
Most importantly, to be successful, we must ensure our goal(s) are not just dreams in disguise. In many cases, these goals will be medium term (3-5 years) or even longer term (5 years or more) and will require multiyear review and potential small, realistic steps to accomplish.
The plan must be flexible enough to absorb changes along the way as world or our life events change. By making our goals SMART, breaking big goals down in smaller easy wins along the way, using our support system, and maintaining our focus, we can be encouraged and successful in making the big changes in our financial situation.