Financial Resolutions to make and keep in 2017

New Year, New You! Right?

For some people a new year is the time for resolutions, for starting anew. Personally I am more of a believer of developing habits, not making resolutions.

“Habit formation is the process by which new behaviors become automatic…. Old habits are hard to break and new habits are hard to form. That's because the behavioral patterns we repeat most often are literally etched into our neural pathways. The good news is that, through repetition, it's possible to form—and maintain—new habits. “ (source: Habit formation, Psychology Today)

According to the psychologist Anna Akbari, Ph.D, there are five key ways to enhance happiness and success through resolutions that will stick. So, if your plan for 2017 is to get out of living paycheque-to-paycheque and start getting ahead I encourage you to read on.

1. Experiment: Try something new without making large, regrettable mistakes. Think about every purchase you go to make and ask yourself, “What would happen if I chose to save this money or put it towards my debt instead?” This past week I was sure I had to go to the grocery store to shop for meals for the week. After looking in my pantry and freezer I was able to find enough ingredients on hand, saving me a trip to the store and about $75-$100. As a result, I was also able to test out some new recipes using up the ingredients I already had readily available. The habit of shopping every week is simply ingrained us, the need to purchase, automatic. Trying something new can be as simple as skipping a shopping trip, or setting-up an automatic savings plan, will you miss that $25 a week? Let’s experiment and see!

2. Disrupt your assumptions: According to Akbari, “Sometimes unlearning is the most important kind of learning.” Just because you have always done something a certain way, or believe something may be impossible does not mean it is. You will never know what could have been if you never try. “My parents never saved for retirement so why should I?” “Everyone will be in debt till the day they die” “I can’t afford to save or invest” (read article here) Talking to an advisor may help you discover that your goals ARE achievable. You CAN save for retirement and reduce your taxes contributing to an RRSP. You CAN pay off your debt. You CAN save and invest!

3. Embrace failure: there will always be road bumps, and chances are you will not succeed the first time, every time. Giving yourself permission to make mistakes, and learn from them, can be incredibly freeing. There will be times when you slip up – you impulsively shopped or you skipped your mortgage payment. Mistakes happen – if you commit to figuring out what went wrong you will be exponentially stronger the next time around. You can recognize the path that lead to your error and commit to avoiding the same mistake going forward.

4. Understand your audience: do not live for others, but live for yourself. Ignore the messages and images you see on social media and surround yourself with others who provide a connection but not competition. It is reassuring to know that the choices you make in regards to your finances are for YOUR benefit (and possibly those of your dependents) and not anyone else. You don’t have to purchase the next big thing, or go on that vacation because your values in regards to saving and spending are different from everyone else.

5. Hustle: Every step you take towards your financial goals brings you that much closer. Applying an extra $100 against that credit card debt, or student loan, brings you that much closer to being debt-free. Every $100 you apply to your future savings & retirement brings you that much closer to financial independence. Celebrate your achievements and never stop moving towards your goals.

So, using the key ways discussed above here are some concrete things you should be doing in 2017 (if you haven’t started already).

1. Pay off your debtStart an emergency savings plan (3 months wages is a good goal)

2. Create financial security for your dependents through life insurance, wills, etc.

3. Establish your savings goals, whatever they may be:

• Purchasing a home

• Saving for a child’s education

• Ensuring you have enough money for retirement.

4. Once you have established your goals... figure out what steps you need to take to achieve them

If you would like to discuss any of the above I am, as always, here to help!

Brooklyn Scott is a Financial Advisor/Mutual Funds Representative for Lewis & Jones Group/Desjardins Financial Group/Desjardins Financial Security Investments Inc. in Killarney, Manitoba.

Mutual funds are distributed through Desjardins Financial Security Investments Inc. For insurance products, Desjardins Financial Security Investments Inc. acts as a national insurance brokerage agency.