Thinking of what New Year’s resolutions you should make 2017? You’re not alone. It is estimated that over half of all Americans make New Year’s resolutions, but only 8% actually succeed.
Why is this? More times than not, the cause of failure is due to the goal itself. Whether it is too vague, immeasurable, or unrealistic, setting bad goals doesn’t give us a chance to succeed.
Confused? Not to worry. Here are five examples of bad financial resolutions, and how you can make them good:
Bad goal: “Pay off my debt”
Good goal: “Pay $___ towards my debt every month”
Paying off your debt isn’t necessarily a bad goal, it is just too vague. You are much more likely to accomplish something if you put a quantifiable number on it. If you truly want to get out of debt, make sure your goal includes a deadline and a set monthly dollar amount that accommodates your current financial situation.
Bad goal: “Save more money”
Good goal: “Add one month’s pay to my emergency fund”
In a perfect world, your emergency fund should cover you for a full year without pay. If you aren’t there yet, focus on chipping away little by little. Adding one month’s of pay to your emergency fund only requires you to set aside 8.3% of your monthly paycheck, which is attainable for most people. If you don’t have an emergency fund, make it your goal to start one.
Bad goal: “Make more money”
Good goal: “Send out two applications per week until I find a higher-paying job”
Everyone wants to make more money, but we aren’t going to pull it out of thin air. Instead, consider what tangible actions you can take to make this dream a reality. One obvious way to boost your salary is by finding yourself a job that pays more.
Bad goal: “Achieve a perfect credit score”
Good goal: “Boost my credit score by 20 points”
It is estimated that less than 1% of Americans have a perfect credit score. Instead of shooting for the stars, aim for something a little more realistic. Boosting your credit score by 20 points is certainly feasible in twelve months’ time, no matter your starting point.
Bad goal: “Plan for retirement”
Good goal: “Open an IRA or 401(k) account”
You’re never too young to think about retirement. On the contrary, the earlier you start planning and preparing for it, the more likely you will achieve it by your desired age. Make it a goal to open an IRA account or 401(k) this year. If you already have both, aim to increase last year’s contributions by 5% or more.
If you are struggling to set or achieve your financial goals, let the professional advisors at American Investment Planners help. We offer financial planning, advising, and investing solutions to clients of all ages and incomes. To schedule an appointment with one of our advisors, please call (516) 932-5130 or email info@
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