For context, a resolution is a firm decision to do or not to do something. And, the making of a resolution can often be sparked by our need or want, upon reflection, to seek positive change in an area of our life.
This may be especially the case when reflecting on the 2020 calendar year.
The flow-on effect of policies implemented to combat COVID-19 (e.g. social distancing and restrictions), saw many of us experience a reduction, or loss, of our earnings (work and/or investment-related).
We may also have been more cautious with our spending, despite our earnings remaining the same. This may have been due, in part, to our concern over the state of the economy and rising unemployment—pointing to a possible reduction, or loss, in our earnings in the future.
With this in mind, we discuss personal finance-related resolutions below.
Personal finance-related resolutions
When it comes to personal finance-related resolutions, this can encompass many different things such as earning, spending, saving, investing, donating, and paying off debt. Potential resolutions could include to:
As you can see, we have also included goals. This is in recognition that resolutions can often fall by the wayside without thinking about and planning how they can actually be achieved. More on this later.
In terms of making your own resolutions, and setting related goals, we suggest reading our articles, ‘Your 2019 financial health check’ and ‘Appropriate measures, adverse events and positive outcomes’.
These articles, when combined together, may assist with taking stock of, and reflecting upon, your existing circumstances (financial situation, goals and objectives) regarding areas of your personal finances, such as your:
By doing this, you can zero in on specific areas where you need or want positive change.
However, before you get started with making your own resolutions, and setting your own goals, it’s important to understand that resolutions aren’t often achieved.
For example, in the context of New Year’s resolutions, roughly 36% of us tend to ‘throw in the towel’ in the first month of making our resolutions—and, when all things are said and done, 88% of New Year’s resolutions fail.
There can be a number of reasons for this, such as the wrong mindset, poor time management, unrealistic expectations, undesirable habits, getting distracted with life, or ill-defined (or no) goals and objectives.
As such, you may find that using the SMART principle for your goal setting proves beneficial, for example:
Additional inclusions can be ‘E for Evaluate’ and ‘R for Re-adjust’ (SMARTER)—these can be important in terms of tracking your progress towards achieving your goal and making changes when appropriate.
2020 was a challenging year, testing us all in one way or another. Let’s take the insights gained and lessons learnt, and put them to good use—moving forward in a positive direction:
Please remember, you aren’t alone—we’re here to help wherever we can.
After reading this article, you may also find the following of interest:
If you have any questions regarding this article, please contact us.