New Year = New Money Goals
Are you tired of living paycheck-to-paycheck? Are you tired of wondering at the end of the month where all the money you earned went? The 2022 New Year is the perfect time to make some financial resolutions. As we all know, the holidays can be an extraordinary time with family and friends, but it can also wreak havoc on your finances!
At Blue Collar Budgets, money goals are one of the first topics we will discuss. It is important, from a coaching perspective, to understand where my clients are currently and how they envision their future. Making New Year’s resolutions may seem like an outdated tradition, but writing down specific money goals for 2022 can have a profound impact on you and your future self. I urge each of my clients to pause and think about what Financial Fitness means to them, and then we can begin the work to achieve those goals!
Starting the New Year by reviewing the previous year’s finances can play a vital role in determining what changes we need to make for 2022. Unfortunately it is rare anyone can accurately review last year’s finances because they are not written down anywhere. Begin the New Year by writing down all of your expenses in January; every time you spend money, pay a bill, order takeout, buy morning coffee, etc. write it down in a spiral-bound notebook. Apps that track spending electronically do not create a visceral emotion connected to spending money like old-fashioned pen and paper.
By physically writing, research shows, we tend to remember more as the emotion leaves an imprint in our brain. Electronic apps and banking websites unfortunately do not create this same effect, and therefore lead to more impulse purchases, which is exactly the behavior they want from you! If you can break this habit and just write down each expense in a notebook, then you will automatically start to re-consider certain purchases. You might question if you really need the newest iPhone, new outfit, or whatever item you are currently considering in your Amazon cart.
For the New Year, it is also critical to decide what goals you would like to accomplish this year, prioritize them, and determine how you will fund each goal (if required). When we write down our goals, rather than just saying them, the same visceral emotion as writing our expenses is created, and the words and feelings are imprinted. Goals do not have to be a complex task or skill, but rather small incremental steps towards something much bigger is the preferred method for most people. If we imagine a large mountain to climb in front of us, it seems overwhelming when considering the whole journey to the summit. However, if we begin by focusing on the tree line 200 yards away, we can break up the big scary mountain into more manageable steps, figuratively and literally! By focusing on the small steps that lead to something bigger, our brain can easily see achievement and positive outcomes, which in turn, allow us to keep pushing forward!
Therefore, for your New Year, New Money Goals the very simple and easy task that will completely change your Financial Fitness journey is to write down every expense; do not analyze the expenses or break them into different categories yet, just get in the habit of writing every single expense down with pen and paper. You will be surprised at the end of the month how many similar expenses you have; like how many times you “just grabbed something quick to eat”, how much fuel costs you, how much housing costs as a percentage of your take home pay. Once we have a month’s worth of expenses, we can start working on those New Year Money Goals so you can achieve Financial Fitness with Blue Collar Budgets!
