Something about the week between December 25 and January 1 makes us reflective.
It may have to do with the fact that we’re exhausted from too many Christmas festivities. We just want to pause and regroup. Or it could be a function of the fact that many of us have the luxury of time off from work around the holidays.
Whatever the case, it’s an ideal time for reviewing and previewing. It’s a perfect occasion to look back over the year that was…look ahead to the year that’s dawning…and do some needed planning and goal-setting.
Maybe that’s where you find yourself. You realize you could stand to do some evaluating, make a few “mid-course corrections.”
If so—if you’re a “New-Year’s-resolutions-type person”—may I suggest three for your finances?
- Resolved: I will take responsibility for my financial life.
Steven Covey defined responsibility as your response-ability. That’s not just an author being cute with words.
One of the most profound steps in human maturity is realizing it’s up to us to respond to life situations.
We have agency. And even if we can’t always change our circumstances, we do have control over how we respond. We are not just helpless victims.
Until you think (and act) like this, you will tend to wait for things to “get better” or for someone or some institution to “do right” by you. Too many people waste far too much time waiting for a financial white knight to come to the rescue.
You are response-able. In 2024, determine to live that way.
- Resolved: I will learn the delight of discipline.
Discipline isn’t optional. You’ll experience it one way or the other. When you learn to control your spending, you get to be the beneficiary of smart self-discipline. That brings good things—even delight.
But if the only control on your buying habits is your credit card’s spending limit, you will be disciplined by someone else. It won’t be pleasant.
Translation: You will pay an exorbitant amount of interest to a financial institution for a very long time. Only then will you learn that a higher spending limit is not the path to greater freedom; it’s the key to a larger prison cell.
- Resolved: I will pay myself first and spend only what is left over.
I can always tell when someone has decided to take responsibility for their own financial life and has learned the habit of self-discipline. These are the folks who are paying themselves first and spending only what is left over. Let me break that down just a bit more.
“Paying yourself first” means that saving money is the first—not the last—thing you do each pay period. You have to save first or chances are, you won’t save at all.
“Spending only what is left over” means no more credit card debt (or consumer debt of any kind). It means you live by a firm budget and you pay as you go.
It means if you use a credit card for convenience, the account balance gets paid in full each month—either with money you’ve previously saved for that purpose or with money you’ve got budgeted and are earning this month. If you can’t do that, you don’t make the purchase, period.
Okay, enough said. 2023 is done. Enough looking back.
Here’s to making 2024 your best financial year ever!
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