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If you’ve ever met me, it won’t come as a surprise that I love making New Year’s Goals. The fresh start, the possibility of doing better, making fewer mistakes, being a better version of myself is so tantalizing that every year I buy a shiny new notebook and some pens and get to work envisaging the me I’m going to become.
Recently I’ve been delving into books which have ranged from challenging my belief that I can do everything (if I just master the correct organizational structure) to providing a practical framework for developing better skills and patterns of behaviour. Of the books that have helped me so far, Four Thousand Weeks by Oliver Burkeman was the most confronting because it required me to rethink some core beliefs.
For many women, but particularly my generation, being brought up with the mantra that you could be anything and ‘have it all’ has largely translated to a reality of having to do it all. This feeds into a constant challenge of trying to find time for everything, when in fact there simply isn’t.
We know that the most common New Year’s resolutions relating to money are to Save More, Pay Down Debt, and Spend Less. So, can my reading list help you make those goals a reality?
To get the year kicked off with something practical, I thought I’d share some of the key takeaways from these books and how they can help you achieve your goals this year. Obviously, if you want individual advice, do talk to your adviser about the strategy that is right for you.
An average life span is estimated at 4000 weeks, and the reality is that (of course!) we just cannot do everything. We have limited time and therefore must constantly prioritize and reassess what we spend this precious resource on. The first step then in setting your goals for 2024 is to be realistic about what you can and will dedicate time to this year. Since time is a finite resource, one way to assess a potential goal or habit that will require time is to consider where you will get that time from. If your goal is to bring lunch every day, where is the time to make those lunches coming from? Are you stopping scrolling your phone 10 minutes earlier and packing it the night before, or getting up 10 minutes earlier in the morning?
This leads into some of the most practical pieces of advice I have come across about making starting and maintaining new habits, from James Clear, author of Atomic Habits. The first law of behaviour change, he says, is Make it Obvious. This can take many forms but one of the most powerful is to specify (write it down, tell a friend, book it in your calendar) the time, day, and place that you will do the activity you are trying to get in a habit of. By specifying it, you have to think less about whether to do the activity and therefore have far greater follow-through rates.
Implementing good financial habits is much easier than a goal to become fitter, I think, because finances don’t generally take much time out of your schedule. However, the four laws of behaviour change are still very relevant. These are:
Make it Obvious – If you want to save more, use your internet banking features to set a savings goal so you can see how well you’re doing over time. If you want to drop a bad behaviour, you reverse this, so to spend less you could delete all your saved online shopping sites so that they are less visible when you’re doing something else on the computer.
Make it Attractive – Spending time with others who have similar goals can be a great way to stay motivated and accountable. You could also try gamifying your savings goals by setting up a friendly competition with friends or family.
Make it Easy – Automating your savings or debt repayments can be a great way to make sure you stay on track without having to think about it too much.
Make it Satisfying – Reward yourself whenever you complete the activity or maintain the habit. For example, if you successfully bring your lunch all week (therefore not buying lunch), then reward yourself with a barista coffee on Friday.
With all the helpful guidance in the world though, it’s important to remember that with any goal, you’re never going to be successful if you’re aiming for the wrong things in the first place. The Power of Regret by Daniel H Pink talks about the various sources of regret in our lives. One aspect that jumped out at me was his description of each of us having three selves: our Actual Self, our Ought Self, and our Ideal Self. So, to apply that to my finances - My actual self spends too much money on takeaways when I’m too tired to cook during the week; my ought self knows she should cook more and save the money, but my ideal self? My ideal self would be in a financial position to buy takeaways when I’m tired and not feel guilty because I can comfortably afford to do so. Following that logic, my real goal isn’t to spend less; it’s to be in a better financial position (to earn more or have more disposable income).
I would go so far as to say that those top three financial goals – spend less, pay down debt, and save more – they’re not the right goals for anyone. They might be steps along the way, but we are very rarely motivated by what we ‘ought’ to do unless it aligns with a bigger aspiration in life. James Clear also talks about this as taking a step back from the habits you want to have, to consider the type of person you want to be.
Then as he says, “Every action is a vote for the kind of person you wish to become.”
Adam Grant in his book Hidden Potential identifies this as your compass. He points out that often when we are trying to achieve a goal or master a new skill, we end up stuck, languishing, and having to retrace our steps and try a different path forward. He suggests that while we may not always have a map, if you have a compass, you can head in the right direction. Identifying your ideal self (or an aspect of it!) and defining the type of person you want to be will help guide you towards the right actions which with some help can become habits.
So, is your ideal ‘financial self’ associated with generosity and providing for your family, or with success and status, or with the freedom to work part-time and travel the world? Once you identify the underlying motivation, you can always come back to that end goal and ask, is this something a ‘financially responsible’ person would do or a ‘financially savvy’ person would do, and act accordingly.
The final advice from Adam Grant is something I have said before – you don’t need to do it alone. In fact, you’re much more likely to succeed if you have the right scaffolding in place to build good habits. This includes a supportive environment and having multiple mentors or coaches.
While having one person you rely on and whose judgment you trust is great, it turns out that we are more successful with multiple mentors providing a greater range of experiences and approaches.
This is where having not only a financial adviser but also a supportive partner, a career coach, an accountant, or even friends who are a bit further than you on the financial journey can make all the difference.
I see my role as a Financial Adviser not just to advise on individual aspects of your finances, and certainly not to simply transact on your behalf. My role is as a guide, to help chart the course, provide scaffolding and support as you progress and redirect you if you’re getting lost in the weeds. Most of our regrets, I have found, come from not having started sooner. So, let’s start today.
Elizabeth.
About Elizabeth: Hi, I'm Elizabeth, one of the Financial Advisers here at Velocity Financial. Day-to-day, this involves engaging in conversations with clients about their lives, families, aspirations, and, of course, financial goals. In a big picture sense, though, I'm driven by my perpetual desire to improve outcomes for individuals and, eventually, communities. At Velocity we aim to bolster the financial literacy of Kiwis, helping to alleviate financial anxieties, and opening up the possibilities of what can be achieved. We empower our clients to formulate a plan for the future. I'm particularly passionate about assisting women in reaching their financial goals and feeling confident in managing their money. To aid in this, I write a monthly blog on topics that affect women and maintain an Instagram page @what_would_she_do.vf. This platform provides financial content for those who might not be prepared to consult with an adviser yet but still require and deserve sound advice. In my past life, I was a nurse, so helping people is essentially my modus operandi (I'm also quite resilient and not easily grossed out!). During my spare time, I'm likely attempting to keep up with my energetic kids. If I do manage to find some time for myself, you'll find me curled up with a coffee and a book.
Elizabeth is the author of the monthly blog What Would She Do? A column for women, by women.
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Disclaimer: Elizabeth Tsikanovski (FSP693611)is a Financial Adviser with Velocity Financial (FSP95466). No investment decision should be taken based on the information in this blog alone. Please see Elizabeth’s disclosure statement on our website.
Always get professional advice
The information shared in this post is meant to be general guide to support you on your journey. When making important decisions about your finances, we encourage you to seek independent financial advice first, tailored to your unique situation. As well as talking with a financial adviser, make sure you talk to your lawyer and accountant too – together they'll help you find the best solution for your specific situation. Our knowledgeable financial advisers are here to help. Check out our website for the details about our financial advisory services in our disclosures https://www.velocityfinancial.co.nz/disclosure-statement.