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Plan Well, Retire Well

Saving and investing your money

You Too Can Write Achievable Resolutions


I just came home from traveling over the holidays with my family, and now have a little bit of quiet time (as in 15 minutes here or there!) to reflect on 2011 and how I want to improve my well-being in 2012. This is the time of year I often try to set resolutions for myself. And, while I don't always achieve them, over the years I have found that a few tried-and-true strategies increases the odds that I will achieve my New Year's resolutions. Perhaps they will help you too!

First, take time to dream a bit. Where would you like to be and what would you like to be doing in the future? Consider the short-term (one year) as well as more long-term. Once you have a mental picture of where you want to go, it's much easier to plan how to get there.

Next, ask yourself, "How can managing your finances help you achieve these goals?" Now you're ready to start making resolutions. Research has shown that people who actually write their goals are more likely to achieve them. So, find a pencil and get ready to write your resolutions. Writing SMART resolutions will help you achieve them. A SMART resolution is:

  • Specific
  • Measurable
  • Agreed upon
  • Reasonable
  • Timed

Let's consider a resolution to save money and practice writing a SMART resolution. Perhaps you'd like to save money take a vacation. The first part of a SMART resolution is to be specific about what you want to do such as: "I want to take a vacation to visit my sister."

Next, the resolution needs to be measurable; estimate how much money it requires to accomplish your goal. For example, "I want to take a vacation to visit my sister that will cost $1,200."

Another important component of a SMART resolution is having agreement among all people involved. Thus, take time to talk to other household members who need to agree upon this resolution.

When do you want to accomplish this? The summertime is a convenient time for vacations; perhaps July 1st would work well. You have six months to save for this goal. Your timed resolution now reads, "I want to save money for a vacation to visit my sister, which will cost about $1200, by July 1, 2012.

Now that you have a specific, measurable, agreed upon, and timed resolution, you're ready to decide if it's a reasonable resolution. If you need $1200 in six months, then you need to save $200 a month or about $50 a week. Is that a reasonable amount for you? Are there some ways you can change your current spending to find money to save?

Or, is that too much money to save each week? When you have a financial resolution that is both specific and timed, you can decide if it's a reasonable. If saving $50 a week doesn't seem reasonable, then you need to adjust your resolution. Do you need more time to accomplish your resolution? Or, could you take a vacation for less money?

Once you've set a reasonable amount, track your progress towards your resolution. Each week or so, check if you are saving enough money to meet your resolution. A handy, down-loadable worksheet to help you write resolutions is available at the University of Illinois Extension website.

This is one simple example of a SMART resolution. You can use this same technique to write resolutions about saving for retirement, paying down debt, or accomplishing finance-related activities such as writing a will. What will be your resolutions for 2012?



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