I recall looking at a website one day and it showed an image of a Venn diagram. The first circle was entitled, “Things You Can Control”, and it had some things listed. The second circle was entitled, “Things That Matter”, and it too had some things listed. Where the two circles overlapped, those were the things that a person should focus on per the site; things they can control and things that matter. I would suggest for this New Year that we change the second circle to be entitled, “Things We Want to Change”. Our two circles would include things we can control and things we want to change and, where those two circles overlap, those would be things we based our resolutions on for 2014. I’m a big believer that people can change most things about themselves, but of course only the things they want to change. I’m sure in your lifetime there was something you wanted to accomplish or a habit you wanted to develop and you, with hard work and persistence, made it happen. If you did it once you can do it again. If your resolution for 2014 is to exercise more, pay down debt, or stop smoking, know that it has been done before by countless people and it can be done by you. Making lasting life changes is in all of our abilities.
To be successful you have to not only look at resolutions as goals, but as behavior changes. Losing 20lbs is a goal. Eating healthier six days a week and exercising three times a week are behavior changes. The behavior changes should result in you losing 20lbs eventually, but they are more measurable and specific, so if you are not losing weight you can pinpoint why. Also, building wealth is an excellent goal to have. Saving 10% of my salary, paying off credit card debt, and spending less than I earn, are more specific behavior changes that will result in us building wealth. If your net worth is not increasing, you will have specific behaviors to point to that reveal why you aren’t succeeding. Be more specific and think about how you will achieve your goals, what behaviors need to change. Also be realistic that changing is not easy and temptations and obstacles will come that will make changing our behavior more difficult.
Your resolution may be to stop being late (I’m preaching to myself right now). Perhaps your behavior changes are to plan to arrive at appointments 15 minutes early, and prepare your clothes and bags the night before. Now of course, there will be those moments when you are tired and you think you can wait until the morning to prepare yourself, or you tell yourself you have a 15 minute cushion so you can lie in bed for 5 minutes longer and you still will be on time. Until something unexpected happens and your are late once again. Expect challenges to your resolutions to come, externally and internally, and prepare your mind that nothing will interfere with your new behaviors.
Lastly, when I say new behaviors, I don’t mean try to change ten things about you all at once. One behavior change a month is great. Maybe you can think of five to six goals you want to accomplish and think of ten to twelve behavior changes that will help you accomplish those goals and put them into practice this year. They say it takes 30 days to develop a habit, so you should be able to develop twelve good habits this year. Even if you only develop six, I’m sure you will be better off in 2014 then you were in 2013.
Below are a few behavior changes you can make to help you build wealth in 2014:
Stop paying unnecessary fees and fines
If paying on credit have a plan to pay it off
Save a fixed amount or percent of your earnings every month. 10% is a good amount.
Start or add to an emergency fund
Pay down debt
Shop sales and buy in bulk
Break expensive habits (smoking, gambling, or eating out)
Make an appointment with your tax accountant (708.720.2860)
Have a Happy New Year!