Save more. Spend less. Invest more, speculate less. Budgeting. Financial and retirement planning. Grand plans that sound like all the cliched answers at beauty pageants - “Everything I do is for world peace, bla bla bla”. That’s a lot of bullsh*t, don’t you think? Why bother?
New year resolutions are somehow made to be broken. Our resolutions fall through and while the intention was good, we feel terrible as we fell short. Consequently, we decided against making any resolutions the following year.
It becomes harder when it relates to financially-related resolutions. Case in point – if you have been on constant habit of indulging in shopping spree since getting your first paycheck, does it make sense to expect you to significantly alter your behaviour just because it is a new year? I doubt so unless you have the sheer willpower of Adamantium. (Ok, go watch X-Men).
At the end of the year, things never quite happen. How so? What went wrong?
It is because we make our resolutions with so little thoughts, planning and preparation to support the quantum leaps that are called for. Anyone can say he wants to go from point A to point B, but the fact is that it is always missing this consideration: “How? What am I lacking to go from point A to point B?”
Put it another way, most financial planning effort actually focuses on the end points. Grand schemes like the below:
- I want to retire with a fund of 5 million hard cold cash
- I want to be a landlord this year
- I want to send my kids to overseas to study medicine
- I want to earn massive returns from my stock investment
All these are not folly goals but I come to realize the most critical thing is to start in baby steps in attaining the eventual objective. When the first next step is identified and then executed, the next thing to do is to monitor the outcome. Once a tangible result is achieved, then only we feel confident to inch forward towards the second step and so on and so forth.
Also important is to Quantify our Goals. Quantify it, no matter how small, into a measure or metric of success. Key Performance Indicators (KPI) if you may. You may have various level of successes but at least you know where you fail, and WHY. I am familiar with this coming from engineering background and training. It may help to keep you accountable. My blogger pals, Kris and ChampDog demonstrated these so well over here and here.
Settle, say 50% of the outstanding credit card balance by April, and don’t incur any additional debt. Set up a standing instructions to save 20% of our net salary. Ask the bank to reduce the credit limit, or do something drastic like literally freezing your credit card, below. Desperate times calls for drastic measures.
Thinking of putting money into the most profitable investment, like earning 30% a year? Doesn’t exist. Don’t kid ourselves, we are NOT on Warren Buffett level. Just learn as we go, start by investing modestly in low risk investment which pays consistent dividends like REITs then slowly take it from there.
So, while we are used to hearing the hoo-haa about making big bucks or planning for a luxury post-retirement lifestyle, perhaps we should start thinking small.
Yes, thinking small.
Think small to think BIG.
To get big, you got to think small.
You may disagree with me – “Anything worth doing is worth thinking BIG!”
Then I might answer – “By the end of the day, not achieving the ultimate goal will pretty much amount to nothing. At least, achieving a small goal is something that serves as catalyst for us to go higher.”
Gives you a sense of achievement to keep you going, doesn’t it?
In case you are wondering if I just talk the talk but not walking the walk, here’s something of what I did in 2012, despite just having a small goal of setting up a more proper blog here at HowToFinanceMoney.com in Dec 2011.
Got invited to Axis REIT Media Appreciation Night
Grown my blog traffic, exposure and subscriber list from ZERO to over 1000+ since May 2012. I had to thank KCLau openly here for this
Got noticed by Money Compass magazine principal consultant, Amy Seok, via KCLau.com, whom then invited me to become a REIT columnist
And you never know, one thing will lead to another.
But my point is, you don’t need to be ashamed of making small scale resolutions.
In fact, your best move is to never make a (grand) resolution.
Or let me put it this way (in case you are wondering about the title above)
Keep It Simple, Stupid!
Or you could do more aggresive K.I.S.S.S.S
Keep it Simple, Short and Sweet, Stupid!
This post is inspired by Ong Shi Jie – My New Year’s Resolution? Not to Make One! in Personal Money January 2013 issue