It’s a new year. It’s time to reset the clock and focus on who you want to be and want you want to accomplish in 2020.
I believe the opportunities we have to transform ourselves in twelve months are huge. This includes our relationships, our health, new things we decide to learn, and our finances. We can make real progress towards the person we want to be in a year.
If finances are part of a resolution for you, here are some suggestions to consider for improving financial well being in the new year.
1) Find a money management partner
If you’re not in a relationship, which other friend or family member is at a similar stage in life? Decide to share your plans with each other and check in on your progress regularly. If you’re married, you have a built in partner in crime. Most people don’t engage their spouse enough on finances. Make 2019 the year you work together on money.
My wife and I have a goal this year to each be using Tiller every week. I’m typically the “accountant” in the family, so I’m in our Tiller money management spreadsheet the most. In 2020, she’s going to be categorizing too. These small simple actions get her head in the game and make all the other conversations about money easier because she’s that much more aware of the dollars coming and going.
2) Write down your financial goals
If you want to move forward with your finances, it’s because you have a goal. Write that down and put it on the wall next to your desk or on the fridge. A vacation? A car or house? Retirement? Financial freedom? Be specific and write it down. Having your goals written down is a powerful reminder why we’re taking our finances seriously, and makes it much more likely we’ll achieve those goals.
In our household, we want to do work on our house, contribute to a few charities that we care about, and continue mapping our our path toward financial independence. These are areas where I’m very aligned with my wife, and we’re both especially motivated to put money aside for these big goals. It’s fun to spend part of a date night planning out these dreams, and they create the context for all of our decisions.
3) Focus on the money stress points for less stress.
What keeps you up at night with your finances? At times when you should be relaxed, perhaps listening to music or out for a walk, if your thoughts begin to wander toward money fears, where is your mind going specifically? Follow that rat hole and label your biggest stress points so you can confront them.
In our family, we need to update our will to reflect our goals and plans together. Hopefully we won’t need this for plan for decades, but it’s reckless not to have an updated will that spells out our wishes and latest thinking for how to take care of our boys if we’re not here. Finishing this work will be a huge relief for us, and it’s our top goal for the winter.
For many, and at times for us, spending is a stress point. Maybe you want to live on a budget or simply track and watch your spending together? If spending is a stress point, acknowledge that and then come up with a plan.
4) Stay financially focused
Let me look at the Magic 8-ball and make a prediction. This new year will be busy. You’ll have less time. You’ll have some compelling opportunities. Your email inbox will grow. Other people in your life, personal or professional, might ask more from you. How can there be time to focus on your finances?
If you know your dreams, have a partner in crime, and face your stress points, then you can make tremendous progress, but you’ve got to stay in the game. You’ve got to keep at it. Check in on your dreams and goals each week. Are you still facing your financial fears?
In our house, staying focused in 2020 means both of us having our eyes on our finances each week. As I mentioned in the first goal, my wife is going to be joining me in categorizing transactions every week. This provides a joint context so we can have small money conversations while making dinner or in the car. We talk about the progress we’re making towards the big goals. Small conversations are key, because there’s often not time and energy for big conversations.
This year I also want my first grader to be tracking his money each week with a pen and paper (he’s not using a computer just yet). These goals aren’t a burden. They keep everyone engaged, and they take only a few minutes each week.
Bringing it all together
If you’re using Tiller, our number one recommendation is to open your Tiller spreadsheet each week to categorize and check your balances. Notice things. Pay attention. Are you making forward progress? Awesome. Are there unexpected bumps in the road? That happens.
If you’re working on your finances each week, you can keep forward progress toward your goals. If you ignore them for a few months, progress is nearly impossible. Do this with your partner in crime or share a sheet with this person so you can both check in. Developing this habit helps you face those financial stress points and keep focused.
This is your year! You can make progress in any direction in 2020. We can’t control our luck or misfortune, but we can control how we respond and how prepared we are to navigate the year ahead. I firmly believe that we are each active players in our financial destiny. A year is a long time. You can make progress in a year. Real, meaningful, exciting progress.
Happy New Year!