Savings are so important to your financial goal. How many times have you started the year by resolving to put more money into savings and investments? If it’s more than once, it’s safe to say the resolution didn’t work. With New Year’s resolutions you may maintain your resolve for a few months, but if old habits take over, it’s back to the drawing board the following year. It doesn’t have to be that way. Here’s what we suggest to get out of the resolution loop.
“This is the year I’ll save more money”
We hear this theme frequently. An individual makes a first-of-the-year commitment to put away more money for the kids’ college fund, retirement or some other critical goal. But after a few months a distraction pops up – a dream trip, a big bill, inertia – and breaks the savings routine. Then it may be several months or another New Year before the discipline to save returns.
Without getting into the psychology of habits and will power, we all know how fragile a resolution can be, whether it involves diet, family, exercise or money.
How can you put some ‘solution’ into your ‘resolution’? We suggest making it automatic.
It’s extremely easy today to set up weekly or monthly transfers from your checking account into your investment account. If you time the transfer to quickly follow your payday, your money will be transferred before it can be distracted, diverted and spent on something else.
The best part is that you never have to remember to make the transfer or negotiate with yourself about skipping a month – it’s automatic discipline.
Make it easy
Money transfers are just one example of smart and necessary financial moves you can automate through technology. You or your advisor can handle it for you. The fewer decisions and actions you need to take to keep your financial plan on track, the better.
If you need some help with this, let us know.
Finally, Max and I wish you not just a Happy New Year, but one that’s prosperous, entertaining, adventurous, healthy, fulfilling, joyous, productive, inspired and one-of-a-kind.
John Osbon – josbon@osboncapital.com
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