We wish everyone a Happy and Prosperous New Year. In keeping with this theme it’s amazing how many articles I have read over the New Year period regarding making New Year’s resolution, my advice is……. don’t, unless you are really serious. Firstly lets analyse the word “Resolution”, the Webster’s dictionary defines it as “the act of resolving or a state of being resolved: Determination – A fixed intention or even better Resolute = determined, firm of purpose and steadfast.”

Most New Year Resolutions are made over a drink and don’t even make it past New Years day, and that’s why I say it’s just a waste of time unless you are resolute – firm of purpose. If you are that way then good for you, now you need to make sure you have a plan.

When it comes to financial resolutions most people lose that sense of purpose and start saying it’s just too hard, they end up accepting their financial situation, which is possibly the same as the previous year and the year before that. Remember it is foolish to think one can end up with more without changing anything they did the previous year.*, so we need to firstly make a detailed plan and prepare ourselves to experience some pain or difficulty to reach the reward whatever it may be.

Let’s take Jack for example; he wants to take his wife on a beautiful cruise around the Greek Islands in 2014. His New Year’s resolution is “I want to save 50% towards the cost of the trip in 2012”. So he is determined and he is “firm of purpose”. He is a good client and tells me his dream because at this stage, that’s all it is however, it’s a start. The first thing I said to him “how much is the whole trip going to cost? He didn’t know – so we researched it together and found it would cost $76pp for the cruise only for 7 nights, up to $4,939pp for 21 days fly/cruise. As he prefers the 21 day experience he needs to save $5,000 plus spending money this year, lets ay another $3,000/2 = $1,500, TOTAL $6,500 this year.

I then suggested he  “get involved” – that is, look at brochures of the cruise and pin up beautiful pictures of the cruise ship and the wonderful Greek Islands around his bathroom, kitchen or fridge to ensure the goal is in front of him at all times. “See yourself relaxing on the deck, dining on fine food or drinking your favourite choice of drink”, I suggested.

So now there is commitment, although nothing has been paid yet but there is a definite plan or almost, because now we need to find the first half of the money = $6,500. Breaking that down to a weekly goal = $130 per week (50 weeks in a year, having 2 weeks off over Christmas).

If the goal is important enough– Jack will find the $130 per week. Actually we contacted his employer and I asked if he would direct debit the $130 to Jacks personal bank account every week and he said that would be his pleasure.

A possible problem was Jack having access to the cash, so we opened a CMA **for him so I would, as his advisor be the “Gate Keeper” of his savings.

If you are serious about New Year’s Resolutions and you are “firm of purpose” for a trip overseas, a change of employment, moving house or to be a better person, father, mother or friend, here are my simple steps.

1. Decide what it is your desire.

Write it down in full, including how you will feel when you achieve your goal and the date you wish to achieve it. I.e. December/January as it’s usually a 12 month goal/resolution.

1. Get other people involved e.g. your Financial Planner, wife, children etc, and make it fun. For example, giving up smoking can be painful and full of stress, but you have to make it a daily thing and offer yourself rewards along the way.
2. See yourself achieving or being involved with your resolution, put up photos, just like Jack is doing. See your goal every day, if you are giving up smoking look at the amount of money you will save and do something with that, not to mention seeing yourself healthier.
3. Never give up, it will seem tough, and the universe will put blocks in your way for example, saving money is usually a different mindset as most people are used to spending. Giving up smoking will usually be a problem if you associate having a drink with a cigarette/cigar, but be strong, drink less, pay that bill you weren’t expecting that just knocked your savings plan for six and get on with your original goal.

HAPPY NEW YEARS RESOLUTION!!!

*“If you do what you’ve always done, you will be what you have always been” – Anthony Robbins

**CMA, Cash Management Account – High interest earning account invested in at-call deposits with a particular banking group. As the Bank is an authorised deposit‐taking institution, these deposits are regulated by APRA. They can only be opened with a Financial Advisor as they come under the securities code.