Financial progress comes second only to goals around diet and exercise when it comes to New Year’s resolutions, and yet, many folks don’t know where to get started when it comes to mapping out a financial future. While most of our resolutions understandably tend to be proactive, there is often just as much to be gained from excising a bad financial habit as there is from adopting a new, positive one. With that in mind, we’d invite you to consider this list of potential financial do’s and don’ts for the new year:
21 Resolutions for 2021:
- Spend less than you make, period
- Work with an advisor to create a formal financial plan
- Own the world: Diversify within and between asset classes
- Splurge, but only infrequently, to maximize happiness
- Read at least one book per month
- Invest in your mind and skillset
- Spend money in ways that increase happiness: Charitable giving and time with loved ones
- Automate every part of your financial life
- Teach someone else about the power of saving and investing
- Learn to savor and appreciate what you already have
- Save at least 1% more than you did last year
- Check out your credit report
- Declutter: Get rid of everything you don’t use or love
- Make a (realistic) budget
- Track your net worth
- Make one extra mortgage payment
- Create a “vision board” with your three top financial goals
- Set bite-sized financial goals with rewards for completion
- Choose experiences over stuff
- Rebalance at least yearly
- Have fun and buy only things that matter to you—you can’t take any of it with you!
- Benchmarking to the S+P 500.
- Keeping up with the Joneses
- Chasing speculative fads and pretending it’s an investment
- Conflating negativity and bearishness with sophistication
- Unnecessarily complicated products
- Confusing a place to live with an investment
- End-of-year price targets and specific forecasts
- Raising lifestyle when income rises
- Reaching for yield
- Watching histrionic financial news coverage
- Depreciating assets
- Confusing our desire for an asset with its future trajectory
- Talking about 10% corrections as though they are rare
- The idea of getting rich quick
- The illusion of certainty when it comes to markets (or life, for that matter)
- Unnecessary consumer debt
- Co-signing loans
- Short-term thinking
- Sacrificing health and happiness for a paycheck
- Assuming that the future will look like the recent past
3486-CLS-12/31/2020