Managing Your Money

Don’t neglect your goals

It seems as though fewer and fewer people are bothering to make New Year’s Resolutions, and with good reason. A commonly cited statistic tells us that less than 8% of New Year’s Resolutions are actually kept. ‘Not very encouraging is it?! However, research clearly shows that people who set goals are more successful. So instead of starting the year with a plethora of goals and resolutions that will likely fall by the wayside as the year kicks into gear, consider an approach, which is more likely to result in small successes.

Special Note:
On January 30th and 31st, we will be hosting presentations on Private Equity and Alternative Investing for accredited investors. Please contact Anna at 514.981.5796 or [email protected]
or for more information.

Start by considering areas of your life that you want to make improvements in – health, relationships, finances, etc…  Next, look at each month as a blank slate, on which to establish a small improvement or goal that you could make each month. For example, if you want to improve your health, you might decide to do a detox in January, increase your water consumption in February, add an extra day to your exercise routine in March, cut out fast-food or sugar in April, go for a physical in May, and so on. Or if you’re not sure where to start, you might decide to consult with a dietician, trainer or doctor in January and build your monthly goals based on that.

The point being that in 6 or 12 months’ time, you can either be in the same place as you are today or in a better place. By starting with small, manageable goals that don’t feel overwhelming, you’re much more likely to succeed and feel encouraged to continue. So make the start of every month a new beginning and think of those few small things that you want to accomplish. Break them down over the month, write them down, make them measurable, and track them. Online, you’ll find many different printable outlines for tracking monthly goals. Consider making some fun goals too, like watching a new movie, doing something that you haven’t done in a while (i.e. ice skating, play cards, etc), or making simple, useful goals, like unsubscribe from unnecessary emails, read 10 minutes before bed about something you want to learn more about, or clean out the pantry.

Remember 3-4 weeks is usually how long it takes to create a new habit. So some of the goals you set for the month may become habits by the end of the month, like that extra day of exercise maybe. Some may not and you may wish to set them as a goal again in another month. In my case, I will often set a goal to drink more water. And I get in the habit for a little while and then eventually I usually lose the habit.  But I always feel better when I’m drinking more water so anytime I fall off the wagon with it, I will set it as a new goal for the next month. I caution you about setting too many goals though.  Start small and slow and bask in your success.

Being a financial planner, you would think that I’m always on top of my finances, but like everyone else I also get busy with life and work (managing other people’s money), and so I need to set financial goals for myself as well.  Here’s an idea of how I keep my financial life on track by breaking it down over the months.

I usually start the year by reviewing and doing basic updates on my financial plan. This is the blueprint of my financial life and a roadmap of my financial future. Unless these are major changes, a yearly update is usually sufficient. If you don’t have a financial plan, make that one of your monthly goals. Most people will prefer to go to a Financial Planner to develop a financial plan, but there are websites that allow you to create a basic plan. Just beware of putting your financial information out there in cyberspace, and make sure you trust the security of the website you’re using.

Another monthly goal I’ll set is to review my budget or spending. Some people choose to live by a fixed budget, I don’t, so it’s really important that I review my spending every once in a while. Knowing what your lifestyle costs is important for many reasons, like planning for savings and retirement, as well as managing retirement once you’re in it. I’m always surprised when I realize how much I’m spending, and I always find it a good exercise to do. I will usually follow this up with a goal of re-evaluating my expenses to see if they are all necessary. I have found myself signed up for memberships that I stop using or services that I keep paying for but no longer need.

This will lead me to review my savings and set a realistic monthly or yearly savings goal.  I will also think about short-term needs that I might want to have money set aside for. It’s important to distinguish between short-term, medium-term and long-term savings, as the type of investments you will choose will often be dictated by the time frame.  It usually helps to have a financial planner or investment advisor help guide you in this area. Personally I have always felt it easiest to have a pre-authorized monthly savings set up, so I will review those amounts and determine how they should be adjusted.

The next goals I will plan over the coming months involve my actual investments and portfolio.  Sometime because of market gains or losses, the allocation of a portfolio will change. So it’s important to check and adjust your investment allocation to make sure you’re comfortable with it and that it’s on track with your goals. Also, investments that may have once been good, can become bad, or higher risk.  So discussing your actual investment holdings and portfolio allocation with your investment advisor should be on your list of financial goals. This brings me to the next goal everyone should discuss at least once per year, that being their risk tolerance.  This can change based on many factors – age, job stability, retirement, business risk, the past year’s investment action, etc. I’ve written many articles on risk tolerance and believe it is one of the key factors to investment success.

Depending on your situation, other financial goals that you could include are to do an insurance analysis, debt analysis, and fee analysis. The majority of people who are either not in the financial industry, don’t have a background in finance, or lack time, should probably benefit to work through their financial goals with a Financial Planner – just as I turn to a naturopath, osteopath, physio, and fitness professional for my physical health.

Special Note: On January 30th and 31st, we will be hosting presentations on Private Equity and Alternative Investing for accredited investors. Please contact Anna at 514.981.5796 or [email protected] to RSVP or for more info.

Lynn MacNeil, F.PL. Vice President, Investment Advisor, is a Financial Planner with Richardson GMP Limited in Montreal, with over 22 years of experience working with retirees and pre-retirees. For a private financial consultation, or more information on this topic or on any other investment or financial matter, please contact Lynn MacNeil at 514.981.5795 or [email protected].

The opinions expressed in this article are the opinions of Lynn MacNeil and readers should not assume they reflect the opinions or recommendations of Richardson GMP Ltd. or its affiliates. The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own legal or tax advisors for advice with respect to the tax consequences to them, having regard to their own particular circumstances. Richardson GMP Limited, Member Canadian Investor Protection Fund.

Related Posts