After thirty-something years working with individuals and families on their personal finances, I’ve developed the uncanny ability to predict their financial futures, often after spending just a few minutes with them. You see, financial success, or lack thereof, comes down to a mindset…a decision to succeed followed by an implemented plan of action. Today I’m going to use my so-called crystal ball to predict your financial success in 2014.
1. I predict… that if you create financial goals for 2014, you’ll increase your chances of significantly improving your finances by 20%. I’m reminded of the scene in Alice in Wonderland where Alice is wandering through the woods and comes to a fork in the road where the Cheshire Cat is perched in a tree. The cat asks Alice, “Where are you going?” Alice responds, “I don’t know.” The cat says, “Then any road will take you there!” Ok, I took a lot of literary license with my quotes but the point is that most people have no goals and wonder why their finances are in such shambles. Luck does happen but for most people, creating financial success starts with goals and a plan for achieving those goals.
2. I predict… that if you write down your goals for 2014, you’ll increase your chance of success to 60%. It’s not enough to just ‘think’ your goals. Research suggests that the mere act of writing down a goal significantly increases the chance of achieving it. It’s hard to explain why this is, but I’d suggest that something happens deep in our subconscious that creates a ‘tension’ between where we are now versus where we tell ourselves we want to be.
Here’s my recommendation: grab a pen and sheet of paper right now…don’t wait! Write down one to three simple, achievable financial goals for 2014. Examples might include:
· Reducing your debt by a specific dollar amount;
· Increasing your long-term savings and investing by a specific dollar amount;
· Starting a college savings plan for your child or grandchild.
Don’t just ‘think it’, write it down. It’s the act of writing that makes the difference.
3. I predict… that if you take each written goal and place them where you’ll see them every day, your chance of success will rise to 80%. One of my partners uses an index card for each goal and places them in his wallet. That way every time he reaches in to pull out his credit card he’s reminded of his financial goals. Achieving financial goals often comes down to the simple choice between satisfying an immediate ‘want’ versus the delayed gratification of a future desire. Each day ask yourself, “What can I do today to move me towards my goals?”
4. I predict… that if you ‘automate’ your goals, you’ll increase your chances of success to 90%. The single best way to achieve a goal is to set in motion an automated system for achieving it. For example, let’s assume one of your goals is to save $1,000 towards your child’s college education. Your best action is to go to the www.CollegeCounts529.com website; open the account; then have $83.33 automatically drafted from your checking account each month. In other words, “Talk is cheap. Action speaks volumes!” The single best way to fail to achieve a goal is to rely on your own self-discipline.
5. I predict… that if you create a big enough ‘Why’ related to your goals, there’s a 100% chance that you’ll achieve your goal! There’s a saying, “If you create a big enough WHY, the ‘how’ will take care of itself. Take a moment to look at the goals you’ve written down (you did stop and do this, right?). Why is each one important to you? Whatever your WHY is, write it down next to the goal. For example, if your goal is to begin a college fund for your daughter, why is that important? I have a friend who always excelled academically. In her senior year of high school, she applied for, and was accepted to an outstanding private school. She was so excited and couldn’t wait to tell her parents. Imagine her disappointment when her parents told her that they couldn’t afford the tuition. How important is it to you for your daughter to be able to attend the best college that she can qualify to attend?
There, I’ve done it. You follow these five steps and let me know this time next year how well my predictions turned out. I’m betting that you’ll be happy with your results. Have a happy and prosperous New Year!