The Sunday Mail
The new year is upon us and with it an opportunity to re-energise our financial health.
Focusing on simple, actionable steps and employing some financial psychology can likelier lead to success.
Yet while the intricacies of our personal financial situations are unique, here are some rules of thumb almost everyone should follow to make it easier to track progress and see real results.
Positive steps toward financial wealth
Do review your financial progress from last year, as well as financial goals yet to be met, to determine where and how you can improve. If you have not already done so, take a moment to analyse your financial outcomes in 2019.
How much did you save, or how much did your portfolio grow? Did you meet your debt repayment goals? If not, what prevented you from doing so?
Asking yourself these tough questions can help guide you towards even better financial outcomes this year. Consider this realistic financial goal: Commit to checking your net worth monthly (weekly is even better). While market fluctuations may affect the day-to-day numbers, checking your net worth frequently helps keep you accountable to overall financial progress.
Do set actionable goals for this year. Pick two or three goals that are realistic and will make you more financially secure.
For example, set a specific amount you would like to save or amount of debt you would like to pay off, and identify what you will need to do to achieve that goal. Studies show that the immediate gratification you receive from succeeding with these initial small steps makes it likelier you will succeed over the long term.
That is why setting too many goals, or choosing unrealistically ambitious ones, makes it more difficult to succeed. You want to feel the pleasure of having saved your first US$100, rather than disappointment if you did not meet an overly ambitious goal of US$10 000.
Do find ways to increase your income this year, either by working toward a raise or finding other sources of income, however small. If you do get that raise, be sure you pay yourself first by putting as much of it as possible toward savings or debt repayment.
Remember: Every dollar you keep is yours for your dreams and future; every dollar you spend, you are giving away.
DON’T compare yourself to anyone else; your progress is your own, and comparing yourself to others can create demotivating emotions. Still, this is easier said than done, especially with social media inundating us with images of perfectly curated lives.
A healthier alternative? Seek the support of others with similar goals by joining discussion forums, groups or healthy goal-oriented activities that allow you to learn from successful peers or compete in a goal-oriented manner.
Using social media and online activities toward aspirations is fundamentally different from merely succumbing to the temptation to compare yourself with others. Seek out inspiration and support from successful people, and do not chastise yourself if you have not reached your destination yet.
Finally, and most importantly, do not assume you can predict the economy or the market. Even professional money managers can not do this successfully. Keep diversified, with your long-term goals front and centre. — CNBC.