This was originally published on Monday, December 12, 2015, in the Pacific Daily News. Click here to subscribe to the PDN.
There is always a buzz and energy around this time of year. People have made their New Year’s resolutions and are determined to be successful. But how many times have we seen these resolutions forgotten by February? When setting goals, even financial goals, you must be ready to make a change, and your goals have to be realistic.
Here are a few tips to help you stay the course:
• Be realistic. If you have $20,000 in debt, most likely you cannot pay that off in a year. You may however pay it off in five years. Think how successful you will feel if you paid your debt off in less than five years and imagine how frustrated you will be if you don’t.
• Be specific. Getting out of debt is not a specific goal. “I will reduce my student loans by $5,000 in a year” is a specific goal.
• Concentrate on one or two goals. Remember quality over quantity. If you create too many goals, you cannot give each goal your full attention and energy. You may become overwhelmed and decide to quit on them all together.
• A plan of action. If a goal is too large or you try to tackle it all at once, it will seem impossible to achieve. Instead, plan out your goal. “I will pay off $400 a month to achieve my goal.”
• Stay positive. Life has its ups and downs. One month you may need new tires and can’t afford to put $400 toward your goal. Don’t get discouraged. You might be able to catch up on another month.
• Celebrate your accomplishments. Don’t wait till next December to celebrate. If you have paid down your debt three months in a row, treat yourself to a little something.
• Have a partner. Having someone who is there to be your support is very crucial. It could be a spouse, a relative or a friend. It really helps if you both work on goals together. Sometimes, you need that someone there to be your voice of reason when temptation is knocking. Some people use their friends on social media like Facebook or Twitter to be their support.
• Know your patterns. Take a look at what behaviors may hinder your goal. Maybe you are an emotional shopper when you are stressed. Create new behaviors that will set you up for success. Instead of shopping when you are stressed, try something else instead.
• Imagine your goal. The tool of visualization is powerful. If you are saving for a car, keep a picture of that car in your wallet or on your computer screen. That way, every time you are tempted to go shopping, you will be reminded of your goal. Come up with reasons why you want to accomplish this goal. Write them down and every time you feel discouraged, read your reasons.
• Be ready. Goals only happen when you are ready to make that change. Once you have decided what your financial goals are, you have to change your mindset. The reason for this change is probably because of past practices. Are you prepared to break those habits?
• Be flexible. Your goals may evolve and change. You, too, will have to be ready to make those changes.
The best tip I can give is that you can’t fail if you are trying. Even if you did not reach your goal of paying off that $5,000 of your student debt in a year, you are still closer than you were at the beginning or the year. The only time you fail is when you don’t try or give up altogether.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at firstname.lastname@example.org and read past columns at the Money Matters blog at http://www.moneymattersguam.wordpress.com.