Create New Habits Instead of Making Resolutions This New Year’s

The annual goal setting has begun! Just about everyone seems to make a New Year’s resolution. To not have one is an acceptable answer especially knowing most fail in the first 20 days of January. Health clubs thrive on sales of people who never attend and countless web coaches offer their time and material to those with the best of intentions. Change is hard. My friend Ben Hardy who wrote the bestselling book Will Power Doesn’t Work will tell you that change by itself is almost impossible.

We have triggers that drive most of our actions. Think about when you are most likely to do something that you wish you didn’t do. For most of us, that bad decision comes at a certain location, time or during a particular emotion. Being aware of your environment can help keep you away from troublesome actions.

There are good habits like brushing your teeth and there are bad habits like excessive television viewing or social media addictions. Most of these habits are triggered by your environment according to Hardy.

Other habit experts say that our bad times spring from periods where we are hungry, angry, lonely or tired (HALT). They use the expression HALT as a code word to let themselves know they are entering a potentially hazardous state.

Not all habits are bad and this is important for your financial future. You can control your triggers to a large degree but you can also build good habits and shape good environments. Thanks to a set of marvelous coaches and friends, I will share with you some of the best habits from a financial perspective I have come across.

One friend uses credit cards in what he deems an irresponsible manner. His objective or habit is to intentionally make a deposit for a certain sum into his savings account every time he uses the card. His theory is he will spend hard cold cash less than using the plastic even though he pays them off every month.

Another friend looks at his investment statement too often examining the balance more than the allocation of his portfolio. He is committing to spending 15 minutes examining a particular holding every time he glances at his phone for his balance. This is not to suggest that is a good idea but it is his intentional new habit.

One friend has a strict budget and this habit makes great sense to me. Whatever her percentage increase is in her budget, she increases in her savings. In other words, if her budget goes up by 5%, she increases what she is saving in her 401k by 5% more. Note that is not an additional 5%! The point being is that she is trying to track inflation as it relates to her family.

New Year’s resolutions to change are fine but an intentional new habit creation is more important long term than a set objective to attempt to achieve. Happy New Year and best of luck in shaping the new you!

Joseph Clark is a Certified Financial Planner? and the Managing Partner of Financial Enhancement Group, LLC an SEC Registered Investment Adviser. He is the host of “Consider This” found on WIBC Saturday mornings from 6-7a.m. as well as three other Indiana-based radio stations. Joe has served as an Adjunct Assistant Professor at Purdue University where he taught the capstone course for a degree in Financial Counseling and Planning.

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Joseph Clark and World Equity Group, Inc. do not provide tax or legal advice. For tax advice consult with a qualified tax professional. For legal advice consult with an attorney.

Joe can be reached at [email protected], or (765) 640-1524.