Here we are, in July, about half way between two sets of New Year’s resolutions. Whether you have planned to save more, go to the gym or give up your addiction to sugar, chances are much of the steam and excitement has died down by now. Since New Year’s resolutions did not work out, this may be the time for anti-New Year’s resolutions.
What are anti-New Year’s resolutions? They are things that you should keep doing to remain exactly where you are right now. Contrary to the traditional resolutions, these are quite easy to keep. Unfortunately, they do have some bad side effects. Your bank account could take a nose-dive, and you could begin to lose sleep because of money worries. But since these resolutions take no effort to follow, could you really expect a different outcome?
If you view insurance as a burden and unnecessary expense, you might talk yourself into skimping or even skipping it altogether when money gets tight. How do you avoid this anti-resolution that can cost you more in the long run? By striking the right balance between reasonable policy pricing and buying adequate protection from adversities. If you are looking to save money, research multi-policy discounts. While you are doing that, check up on the financial health of your insurer. Ideally, you want to find a company with competitive pricing and a solid financial foundation.
Tell yourself you will take care of “it” next month.
Whatever “it” is for you (annual physical exam, finalizing your trust, meeting with a financial planner – take your pick), I will let you in on a secret. It will take less time and be less painful than you fear. The sooner you can take care of the basics, the more money you will save in the long run. You would not wait to visit the dentist until that cavity turns into a root canal, would you?
Let the media guide your investment choices.
CNN, Jim Cramer, Suze Orman – there is no shortage of experts on TV who will tell you what you should do with your money. What’s wrong with that? Well, everyone’s financial situation is unique. You have your own set of resources, goals and needs. No talking head can possibly know enough about your circumstances, so why would you trust their advice to be a good fit for you? If you are confident in your ability to follow the market, make good decisions and remain steadfast when the market hits a bump, turn off the TV and manage your own money. If you don’t want to assume that responsibility, work with a trusted financial advisor. Just don’t second-guess him or her because of what Jim Cramer said.
Make emotional decisions with money.
If you track your spending over a few months, you will begin to notice patterns – and some of them may relate to emotions. Do you tend to buy a new pair of shoes or a purse after a tough day? Do you go overboard with Amazon shopping? Do you rationalize an expensive purchase “because you are worth it”?
As long as your relationship with money is guided by emotions, you will continue to be surprised by those credit card statements (and not in a good way). If you want to break out of that cycle, begin with tracking your budget and automating good habits.
Worry about things outside your control.
Do you lay awake at night, worrying about money? I cannot offer a magic wand, but I do have a piece of advice. Begin by taking care of what you can: set a budget, create a savings plan, meet with a financial planner, review your insurance policies. Once the basics are in place, remind yourself that worrying is not productive. Use your concerns and dreams to fuel your actions, but don’t stress about things that are outside of your control anyway.
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