The turning of the calendar year is traditionally a time when you feel inspired by the possibilities of a new start, a new beginning, and the onset of positive change. It can be a time that is empowering, energetic and life supporting; it can forever alter the trajectory towards a more successful money life.
But like any change, you want to consider the good, the bad, the ugly, and importantly, the challenges that transitions can bring.
You can conquer your transition by distilling it down to key essential components:
1. As Simon Sinek says, “Start with Why”. Understand not only why change is beneficial to your life but also that the outcomes are so powerful and important that no other choice remains. Begin with a declaration.
For example: I must become debt-free within the next 12 months; or
I must accumulate X dollars to go towards a down payment on a home, or
We must open and fund a college savings program for my child by February 1.
You get the drill; it’s about why, in your heart and mind, something must occur. These are known as your “Money Musts”.
2. The second step is to get a handle on where you are right now. If your “must” is to pay off your credit cards, then you have to know exactly how much money you owe, to whom, and how much money you have to reduce the debt. Using credit card debt as the example, you might need to tighten your belt and alter some of your spending decisions to a greater or lesser degree. If paying off the cards is so important, ask yourself what you’re willing to do to make that happen!
or beneficial for you today. Consider that those beliefs, habits and behaviors might not support your adult values—or your partner’s, if you have one. If that’s true for you, it’s time to rethink your beliefs, rewire your habits and realign your behavior to actuate your life today and your future goals.
4. Anchor past successes. Can you remember a time when you made a successful change? It doesn’t matter how small it might seem, but if you can recall what you did and how your mindset impacted the outcome, it can be a powerful tool in working towards success on your New Year’s resolution. Remember the feeling you had when you accomplished your goal; and use that sentiment to commit and motivate you to make future positive changes and money habits.
5. Consider the roadblocks. If you’ve ever been on a diet, you know that somewhere between the first day of eating sensibly and you reaching your goal, there will be a piece of chocolate cake, dish of ice cream, candy bar or bagel that looks you right in the eye and demands you to eat it—tempting you to veer off your track to success. Your ability to get past that “demand” is the difference between success and failure.
These transition periods can be hard to overcome, but if you know it’s coming and manage your expectations so as not to be surprised or off put, they are less difficult to conquer. This is where you need a support system, so that when that part of your brain is telling you to dig into some retail therapy or that delicious looking cookie, you need to be armed with the strength to resist. This is where having friends and professionals around you to help support you is so vital.
Surround yourself with those who have the expertise and the willingness to help support and guide you through the process of getting yourself to where YOU want to go.
6. Small steps rule! Setting up small steps leads to successes and lowers the pain threshold. Small steps are less intimidating and tend to be easier to envision; and thus take action on. If you are currently paying the minimum on the credit card each month, consider the following: pay your bill every time you get paid, not when the bill is due.
Taking this small advanced action step can make a big difference. Find places in your spending that hold less value to you than getting out of debt. Start with the areas of the least pain. For example, set a smaller entertainment budget by, say, $100 per month and adding that $100 to your payment. Think of the things you can change that won’t kill you, but that will help decrease your debt each pay period.