Late-January is the time when the rubber meets the road on those New Year’s Resolutions. Your new gym membership may have lost its luster, and the thought of having one more juice-cleanse meal replacement instead of a tasty burger starts to feel untenable.
As any good fitness coach will tell you, the key to hitting your fitness goals isn’t a crash diet. It’s a sustainable, achievable plan that you’re able to stick with for more than just a few days.
The same is true of hitting your financial goals. Sure, you can put yourself on a highly restrictive plan where you radically limit your spending, but there’s almost no chance you’ll be able to maintain that for any meaningful period of time.
While drastic, short-term changes can seem like they might be the fastest way to see results, you seldom get the outcome you desire. So if you’re planning to pay off some debt, you probably don’t want to subject yourself to the 30-day ramen noodle challenge to fund it.
Instead, think of achieving your financial goals much like training for a marathon. No one sprints off their living room couch headed straight for the finish line. Instead, they’re out each and every day – just aiming to go a little further than the day before.
Here are a few things you can consider in order to avoid putting your financial life on a crash-diet:
Start small. Think about what small, sustainable changes you can make in your daily life that will help you progress toward your goals. Starting your journey to financial success may be as simple as adjusting what you contribute to your 401(k) from each paycheck.
Start Early. If your child is a senior in high school and you’re just now starting to think about paying for college, it’s going to be tough to make meaningful progress toward that goal in time for it to matter. But, if you start when they’re young, it’s going to be a whole lot easier to meet those goals.
Have a plan. One of my favorite mentors used to always say, “a goal without a plan is just a wish.” Meaning, you may have been thinking about retiring early since you started working, but if you don’t have a solid plan to get you there, you might as well just be crossing your fingers. That’s why it’s critical to know what steps you’ll take (and when) to get where you want to go.
Don’t panic. When you’ve got a long-term financial strategy, you’ll likely experience some highs and lows along the way. Whether it’s the natural ebbs and flows of the market, or a major market crash, just try to stay calm. Part of the benefit of having a long-term, sustainable financial plan that’s right-sized for your level of financial risk is that short-term gains or losses are anticipated. This is a proactive step that helps to keep things in perspective, rather than being reactive when things start to turn.
Remember, less pain and more sustain. And as always, Paceline is here to help if you ever have questions.
This blog was written by Jeremy Bohne, Principal & Founder of Paceline Wealth Management. Paceline is a fee-only investment advisor serving clients in the Boston area, and on a remote basis throughout the country. Paceline specializes in helping tech and biotech executives, physicians, and those seeking financial planning services.