Personal finance planning: Do you need resolutions or goals?

With the holiday period behind us and now that we’re into February 2015, now is the perfect time to talk about New Year’s resolutions. If you set them, how are you doing? Still sticking with it or has your enthusiasm dropped off a bit?

The reason we ask is that maybe we are all overlooking something that makes resolutions very difficult to keep; and why setting goals instead of making resolutions might make more sense. 

The difference between goals and resolutions

Goals and resolutions are essentially the same thing, but the issue with making resolutions is that they imply that we are somehow doing something wrong or poorly. Many of us are already not lacking for guilt or criticism in our lives, so why heap more on ourselves at the start of each year?

This logic can trip up many investors. Like New Year’s resolutions, we frame our past financial behaviour as doing something wrong. Because it’s a negative, it can be difficult to wrap our heads around making a change. Who likes admitting that they made a mistake?

But something happens when we talk in terms of setting goals. It becomes more about the possibility of something good happening as opposed to the negative of a past mistake. We get that this seems like a very small distinction, but it’s an important one.

The importance of attitude in personal finance planning

When we talk about making better financial decisions, attitude matters. How much criticism do we need before it becomes counter-productive? It’s one thing to acknowledge and learn from a mistake, it’s another thing to make it our focus going forward.

By setting personal finance planning goals that imply something good, we’re changing the tone from one of blame to one of possibility. Did you resolve to stop spending all your money on things you don’t really need? What if instead you set a goal to get serious about implementing a strategy to achieve financial independence? The goal deals with the mistake and gives you a positive way forward while the resolution implies you did something stupid.

setting personal finance planning goals
From personal finance planning goals to the right investments

So why not latch on to the small thing of setting a goal instead of making a resolution? If you’re struggling with your personal finance planning resolutions, it’s not too late to make the switch.

Set a goal or two for 2015 and see what happens. To help you, Calibre has some great client tools to bring these goals to life, which will in turn help inspire you to action. Please let us know if we can help.

This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial and tax/or legal advice prior to acting on this information. Before acquiring a financial product a person should obtain a Product Disclosure Statement (PDS) relating to that product and consider the contents of the PDS before making a decision about whether to acquire the product. The material contained in this document is based on information received in good faith from sources within the market, and on our understanding of legislation and Government press releases at the date of publication, which are believed to be reliable and accurate. Opinions constitute our judgment at the time of issue and are subject to change. Neither, the Licensee or any of the Oreana Group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Gordon Thoms and David Conte of Calibre Private Wealth Advisers are Authorised Representatives of Oreana Financial Services Limited ABN 91 607 515 122, an Australian Financial Services Licensee, Registered office at Level 7, 484 St Kilda Road, Melbourne, VIC 3004. This site is designed for Australian residents only. Nothing on this website is an offer or a solicitation of an offer to acquire any products or services, by any person or entity outside of Australia.

Liked this article? Share it!