As I start each new year, I take a moment to pause and reflect on my favorite definition of insanity:
“To keep on doing the same things over and over and expect different results.”
We’ve all been guilty of this at times; we make the same types of decisions, and then we wonder, with a sense of bewilderment, how we end up in the same situation once again.
Make this year different!
Take the time to think about what you can do differently in 2011, so at this time next year, you will look back with a renewed sense of accomplishment and pride. Whatever you need to do, start now. Just taking the first step feels great.
To get you headed in the right direction, I’ve made a list of 5 New Year’s Financial Resolutions; small things that can help you make better, smarter financial decisions both for the coming year, and for the rest of your life.
New Year’s Financial Resolution #1 - Learn One New Thing About Investing This Year
Education is empowerment. As you learn more, you will naturally make better decisions. Empower yourself this year by learning something new. Not sure where to start? Here are a few ideas:
New Year’s Financial Resolution #2 - Make Your Own Personal Financial Statement
You can stick your head in the sand, but trust me, when you come up for a peek, things won’t be much different. A better choice; make decisions by starting with a clear picture of where things stand.
One CPA I knew started with a negative net worth, which means he had more debt than assets. Within 4 years he had grown his net worth to over $1 million. How did he start? Painfully – by looking at how he was spending his money and the debt he had accumulated. He put it all in a spreadsheet, and tracked his progress every single month.
For step by step instructions on how to calculate your own personal financial statement read:
New Year’s Financial Resolution #3 - Spend Less And Save More
The temporary “feel good” that comes from spending isn’t nearly as satisfying as the solid sense of self-respect that comes from spending wisely.
The following 3 articles are packed with ideas on how to spend less and save more.
New Year’s Financial Resolution #4 - Invest In Yourself
Whether it be improving your career skill set, or upgrading your look, investing in yourself always pays off. For specific ideas, read:
New Year’s Financial Resolution #5 - Find The Right Financial Advisor
Do you realize the wrong financial advice, and thus the wrong financial advisor, could be costing you thousands of dollars a year? Do you know how your advisor is compensated? How does that compare to other advisors? Do they have the expertise you need?
Even if you prefer to do things yourself, the occasional check up from an advisor who charges hourly fees may provide you with some valuable tips.
It's difficult to know where to find the right person, or what questions to ask. The following articles will get you started on the right path:
Granted, it may take more than a year to get through all five resolutions above, so start with one. The important thing; it's a new year - don't make it just like the last one - unless of course the last one went just right.