05 January, 2016

“A Wise Man Never Plays Leapfrog with a Unicorn” - By Arnold Machel, CFP®

The New Year has just begun… and already you’ve broken 2 of the 8 resolutions you made and you are just about to give up on another. Does that sound like you? If so, you are not alone. According to a University of Scranton study, only 8% of individuals are actually successful at achieving their resolutions. On average we manage to maintain 75% of our resolutions through the first week of the year, dropping to 64% by the time January is done and less than half before six months are up.

The most common resolutions…

  1. Lose Weight
  2. Get Organized
  3. Spend Less, Save More
  4. Enjoy Life to the Fullest
  5. Stay Fit and Healthy
  6. Learn Something Exciting
  7. Quit Smoking
  8. Help Others in Their Dreams
  9. Fall in Love
  10. Spend More Time with Family
If the success rate is so low, why should we even bother? For some this may seem to be just semantics, but I have to say that personally, I’m not a fan of resolutions per se. I am, however, a huge fan of goal setting and planning. To me, the problem with a resolution is that we are likely to fail; whereas with a goal, while we may
fail to meet our time frame, that doesn’t necessarily constitute failure. We just keep striving towards it. In Luke 14:28‐32 Jesus illustrates the importance of counting the cost of following Him and in doing so, highlights the importance of looking ahead… of counting the cost… of planning. Both Proverbs 21:5 and 14:8 also point to the importance of planning and of looking ahead. The title above is my way of painting a vivid picture of the cost of not looking ahead. Just call it the NAMV or the New Arnold Machel Version of the two verses in Proverbs.

But in order to plan, one must first have a goal.

If you are really serious about achieving them, goals should be SMART.

S ‐ specific
M ‐ measurable
A ‐ achievable
R ‐ results oriented
T ‐ with a time frame

After you’ve set the goal, only then is it the time for planning. A couple of great questions to ask yourself are…
  1. “What steps do I need to take in order to achieve this goal?” and
  2. Are there any actions I can take that would ensure that I achieve this goal?
Those two questions may help you determine the best course of action. Then just do it. Simple, but not usually easy.

Let’s look at a very specific example. Let’s say that your goal this year is to spend less and save more. That’s not specific enough to be a SMART goal, though. So you get specific and decide that you want to save an extra $2,000 per year in 2016. That’s Specific, Measurable, Achievable, Results Oriented and has a Time Frame. Ok –
now you are on your way. 

Next, you examine your situation and think about the two questions above. You determine that for you the answers are…

1. You need to spend $2,000 per year less.
a. Assuming that it doesn’t happen immediately, you round that to $200/month
b. You determine that by reducing your cable bill, your phone plan and your latte consumption, you can get there.

2. Automating a $100 withdrawal from your bank account into your savings account on the same day that you are paid (semi‐monthly on the 1st and 15th of each month) would guarantee that you achieve that goal.

Perfect! Now all that’s left are a few phone calls or mouse clicks to make, and you are guaranteed to achieve your goal. Once the cable and phone bills are reduced, the only area you can fail is with the Latte factor, so you might need to set yourself up with a control system, such as a monthly cash amount in an envelope for your
Lattes just to make sure that you stay within your limits. 

Use the same approach on just about any goal and you can make sure that you achieve them. Goals about breaking or changing habits can be much harder to achieve and may require additional strategies and a greater focus on small incremental improvements, but the concept is the same. This year, try to re‐frame your resolutions. Make them goals and make plans to achieve those goals in a timely way. Like Zig Ziglar said, “ If you aim at nothing, you will hit it every time!

There is a whole science devoted to goal achievement. The books written on goal setting, planning and the breaking of old habits vs. the creation of new ones are too numerous to count. Hopefully this short summary will help move you along your path and/or break a log jam you have. Certainly, if you would like my recommendation on some books that might help you on the path to achieving all of your goals or changing your habits for the better, feel free to fire off an email to me with your situation and I can send you the name of some books that have helped me. 

Arnold Machel, CFP® lives, works and worships in the White Rock/South Surrey area. He attends Gracepoint Community Church where he serves on the Leadership Team. He is a Certified Financial Planner with IPC Investment Corporation and Visionvest Financial Planning & Services. Questions and comments can be directed
to him at dr.rrsp@visionvest.ca or through his website at www.visionvest.ca. Please note that all comments are of a general nature and should not be relied upon as individual advice. While every attempt is made to ensure accuracy, facts and figures are not guaranteed. 


Personal Notes:
Study cited: University of Scranton. Journal of Clinical Psychology http://www.statisticbrain.com/new‐yearsresolution‐statistics/

Books:

The 7 Habits of Highly Effective People
The Millionaire Next Door
Think and Grow Rich
The Power of Habit
The E‐myth
The 4 Disciplines of Execution