Quitters’ Day
Have you heard of Quitters Day? It’s now officially a thing: the day people are most likely to give up on their New Year’s resolutions. And it falls on the second Friday of January, which, in 2023, also happens to be Friday the 13th (double whammy for the superstitious among us). That’s not even two weeks into the new year!
But it doesn’t have to be that way. If you are SMART about the goals you set, you can buck the quitter trend and stick to your resolutions all year to end 2023 with a feeling of achievement!
How to make SMART financial resolutions
The SMART method has been around for decades. That’s because it is effective. Often used in a business context, it can equally be adapted to your financial resolutions to help you to set goals that don’t feel so overwhelming or vague that you give them up before January is out.
SMART is an acronym that spells out what your goals should look like. Here it is in a nutshell:
- Specific
- Measurable
- Attainable
- Relevant
- Time-based
The number one financial New Year’s resolution – and how to keep it
The most common financial New Year’s resolution is to pay off debt. According to one survey, this is the goal of 53% of Americans who make a resolution. So let’s take that as an example and show how we can apply the SMART method:
1. Specific
Put an actual figure on the amount of debt that you want to pay off by the end of 2023 and then break it down by month.
2. Measurable
In order to measure how you are doing, create a spreadsheet of your debt and update it each month to show progress. It will hold you accountable. In addition, seeing your debt reducing in black and white will be a motivating factor to keep you on track.
3. Attainable
Although having no debt is the ultimate goal, don’t make that your objective unless attaining it is a realistic possibility in 2023. Overstretching yourself with your resolution is a surefire way to get demoralised and give up. With rising inflation to deal with, err on the side of caution when setting goals to give yourself the best chance of success.
4. Realistic
You’ll need to take a deep dive into your monthly budget to set a realistic target of the amount of your monthly disposable income you are going to dedicate to paying down debt. It needs to be high enough to make an impact but not so high that you won’t be able to cover your other essential expenditure on accommodation, bills, insurance etc.
5. Time-based
With a New Year’s resolution this one’s easy as your 12-month timeframe is fixed. If you stick to your goals, you’ll be in a better financial situation at the end of 2023 than you are now. And ready to set new SMART goals for 2024, all the while working towards a more secure financial future!
Other ideas for financial New Year’s resolutions
We’ve looked at paying down debt here, but the SMART method can equally be applied to saving, which is at the heart of all financial planning.
Your goal could be to establish an emergency fund of six months’ worth of expenditure, to save $x into your retirement fund in 2023 or to amass enough to pay for a year’s worth of university fees for your child. Take a look at some more ideas here.
A leading provider of expat financial services and wealth management services across Asia.
