February Resolutions

Every year, New Year resolutions stories pop up everywhere—we resolve to lose weight, quit smoking, build a budget, join a gym, eat healthy….etc.  By February, 80% of resolutions have failed according to a US News article….leading to a cold and gray February filled with guilt and anxiety.

More recent studies have shown that New Years resolutions are set to fail from the start—first of all, we are all coming off of an incredibly hectic holiday calendar.  The sheer exhaustion of making it through rounds of Christmas parties and holiday events is draining, and makes it mentally tough to make big life changes on January 1.  Plus, January is not exactly an easy month for most folks either—everything at work and school picks up again, extracurricular classes and activities restart, the calendar is filled with days off like MLK day and teacher workdays, and the tax papers start rolling in…not exactly an easy month to add new habits to…

So, we propose that February be the month of new resolutions.  Everything is back to its normal routine, and it is sort of a boring month anyways.  Also, mathematically, it is the best month to start as it is the shortest…and therefore easier to complete your new habit all month long. 😊

The New York Times had a great article on how to make resolutions stick from a scientific approach, and one of our favorite tips was being patient.  When making big changes, it is tempting to make huge goals and try to tackle a big change by “ripping the band aid off”.  But, actually, our brains are wired to make more subtle and small shifts.  So, instead of trying to lose weight by doing Whole 30, it may be easier mentally to just focus on making one healthy substitution a day—say blueberries for dessert instead of ice cream.  Apparently, those small incremental changes are easier to make than huge giant ones for our human brains…

So, for those of you that made money resolutions like spending less, saving more, investing better…we are happy to help you craft those smaller goals.  Some we typically see are:

  1. Setting a budget—we see people start from scratch all the time, looking up an budget rule of thumb like NerdWallet.com’s 50-30-20 rule, and then trying to cram their expenses into that framework. It may work, and is well intentioned, but it can be frustrating.  Instead, we recommend looking for the one budget item that is easy to shift (maybe that unused gym membership from January? 😊) and making that budget item more productive.
  2. Saving more—we see folks running an online calculator that tells them how much to set aside for retirement or college….and then getting discouraged at the large sum needed. Instead, we recommend starting with a small increase (or amount if you haven’t started) in your current savings.  Then, set a reminder to slightly increase that savings amount in 3 months.
  3. Investing well—it is easy to get distracted by what seems like a sure fire investment—or to get scared into sitting in a bank account. Either can be disastrous.  So, we recommend hiring a professional to help.  The objective, third party perspective as well as the professional allocation are invaluable.  It doesn’t have to be expensive either—Wealthfront or Betterment can invest sums as small as $500 for .25%.  For more personal advice, financial planners are an excellent investment.  A study by Vanguard estimates an advisor adds about 3% return to their clients annually…


Good luck with your February resolutions, and let us know if we can help you keep any of them!

Categories : Financial Planning

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