Did you make some New Year’s Resolutions? Many, if not most, people do take a few moments to reflect on the previous year and how they want the upcoming one to be different. But change, though relatively simple, is rarely easy. The average resolution lasts just six days before it’s completely abandoned, only to be remembered sometime in late January. By that time, we just say, “Oh, forget it” and chances are better than even that you’ve already given up on at least one of your New Year’s resolutions.

But it doesn’t have to be that way.

Take a look at the Top 10 New Years Resolutions:

1. Spend more time with friends and family
2. Get in better shape
3. Lose weight
4. Quit smoking
5. Enjoy life more
6. Quit drinking
7. Get out of debt
8. Learn something new
9. Help others
10. Get organized

Every one of those “resolutions” are huge, vague aspirations that fall more into the “it would be nice if …” category rather than the “here is my specific plan to accomplish X” category.

But even grandiose plans are no good. You can create a huge spreadsheet detailing your exercise plans, or your dieting plans, or your get out o debt plans, or whatever, but when 5AM rolls around and it’s time to get out of bed and begin that 2 mile walk … things change. The blankets are so warm and the air outside is so cold!

What’s the best way to achieve your resolutions?

In a simple phrase, one day at a time, one small goal at a time.

Far too often our goals are out of touch with reality and though it’s admirable to reach for the stars, you will never reach one. Let’s reach for something that’s actually within reach. Change your big time goals into daily successes. Instead of setting a goal to “lose weight”, set a daily goal to only eat 1,500 calories today. Instead of setting a goal to “exercise more”, set a daily goal that today you will walk 2 miles today. Instead of setting a goal to “get out of debt”, set a daily goal to put aside an additional $2 each day to put towards your debt. Instead of setting a goal to “quit drinking”, set a daily goal that you won’t have a drink today.

I personally think the whole problem with our current state of goal setting is that we believe that every goal has to be a Big Hairy Audacious Goal (BHAG) and it puts us all into a funk. We look at this enormous mountain and we start trudging but after a couple of days, we don’t notice any significant progress and giving up not only becomes easier, it becomes the next logical step. After all, of the 14,100 feet I have to climb, I’ve only accomplished 120 feet in 6 days – whereas if we had set a goal to climb just 20 feet per day, we would be right on target.

I’m not saying that all goals should be ridiculously easy. What I am saying is that our goals should be attainable and reachable for no other reason than an attainable goal is more often reached than one that’s out in space.

How many goals should we set each day?

I think we should set no more than 5 goals per day. Any more than that an we’re overloading our brain. Try setting daily goals such as:

• Health
  • I will eat 4 servings of fruits/vegetables today or
  • I will exercise by walking 2 miles today or
  • I will not smoke a cigarette today
• Money
  • I will save $2 in cash today to put toward my debt today or
  • I will open a brokerage account today or
  • I will set up an automatic savings account deposit today or
  • I will establish a budget today
• Personal
  • I will spend 30 minutes reading to my son today or have a tea party with my daughter today or
  • I will spend 30 minutes just listening to my spouse today or
  • I will spend 30 minutes reading my Bible or devotional today or
  • I will spend 30 minutes volunteering at my local favorite charity today
• Career
  • I will get all my reports completed and on my boss’s desk today or
  • I will contact 4 recruiters in my industry today and send them my resume today or
  • I will try to see things from my boss’s perspective today
• Fun
  • I will make three people smile today (do this every day and you’ve made over 1,000 people smile in one year!) or
  • I will plant, fertilize and water one vegetable plant or flower today or
  • I will learn more about [insert favorite subject] today or
  • I will organize my [pantry, closet, files, etc] today

Notice what every one of these resolutions has in common? They all have the word TODAY in them. What’s freeing about this type of resolution-making is that if you screw up one day, you can always set another one tomorrow. You can start over each day … as a matter of fact, you’re REQUIRED to start over each and every day.

Accomplishing goals helps you enjoy life more! That’s #5 on the most common New Year’s resolutions.

Anyone can set a goal

But not everyone accomplishes the goals they set. Those that do, do so by breaking down those lofty, BHAG goals into manageable chunks.

Once you get on a roll of setting and accomplishing these smaller goals, make sure you don’t break the chain! Keep on setting and keep on accomplishing those little goals and before you know it, you’ll be able to say, YES, I did accomplish my New Year’s resolutions. You’ll be in the minority but it is oh so sweet.

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Did you know the average New Year’s resolution only lasts 6 days? Many resolutions don’t even last that long but there are many resolutions truly worth keeping this new year. One of those resolutions to keep is “living within a budget” and using your budget to plan your future.

I say “living” because using a budget really is a habit you choose. It’s almost like you are determining your culture because you determine where your money goes and how it’s spent when you’re on a budget. That isn’t how things happen for 90% of the people you know (it may be why many of them are broke).

Creating a budget you can live by can be done with a pencil and paper if you want. But if you’d like to take it up a notch and not only know where your cash is going, but PLAN for it is to use a budgeting software and the BEST budgeting tool in my opinion is YNAB (You Need A Budget).

Why do I believe YNAB is the BEST home budgeting software?

YNAB helps you:

• Stop Living Paycheck to Paycheck
• Get Out of Debt
• Save More Money Faster

YNAB is not only different, it’s BETTER!

With YNAB, You Give Every Dollar a Job

Each month you assign your available dollars to spending/savings categories. This process takes 20 minutes and revolutionizes the way you think about your money. You control your money, not the other way around. Your spending can then align with your core values.

YNAB – You Need A Budget – it’s the best and you can try it for FREE!

With YNAB, You Save for a Rainy Day

You’ll anticipate larger, less-frequent expenses and will be ready for them without even having to think about it. Insurance premium due in six months for $600? YNAB’s software helps you save $100 each month while you watch the car insurance category of your budget balance grow. Then when the bill comes due, you’re not in a bind … again. When you save for a rainy day, you eliminate the crazy ups and downs in your financial life and gain a true picture of your discretionary income. Enjoy opening the mail again (the money will be there waiting to pay that bill).

With YNAB, You Roll with the Punches

The key is to keep moving even when you fail (you will). YNAB will make small adjustments when you overspend, ensuring that you fix those mistakes before you go to the next month. As a result, you stay on your budgeting feet, so when you DO fail, you don’t quit. You start each month with a clean slate – a huge psychological boost.

With YNAB, You Stop Living Paycheck to Paycheck

Isn’t that what you want a budget to do? YNAB was designed so that you gradually begin living on last month’s income. It’s designed into both the software and methodology to help you do just that. You’ll automatically find the coveted “breathing room” in your finances. You’ll stop trying to time when bills are due based on when you get paid, and if you’re on a variable income, your budgeting “problem” will be eliminated.

YNAB really IS different

YNAB bills itself as different than other budget or money management programs and the reasons are many:

1. They don’t demand your banking passwords or logins. YOU retain control of those so you don’t have to worry with identity theft with your budgeting software.
2. They use the highly reliable online envelope system with some creative twists.
3. This budgeting system helps you save for those “rainy days” and large purchases – including insurance or taxes.
4. YNAB forces you to focus on your budgeting leaks … and fix them quickly.
5. The software makes adjustments if you overspend, helping you correct those mistakes before you go to the next month.
6. It even works for those “spontaneous people!”
7. The system frees you from the paperwork monster (my personal favorite).

Give YNAB a try with a FREE TRIAL!

YNAB will give you 34 days to try out the software and see if you like it. If you don’t, no problem, but I feel confident you’ll find YNAB to be the best software around to help you get your money under control.

Check out the best budgeting software on the Internet! YNAB – You Need A Budget

Links to products or services may be affiliate links. See my disclosure policy on the site or on my About page.

Taking the time to teach your children a few financial lessons can insure they become fiscally responsible adults. Though nothing is set in stone – no one is doomed because of their parent’s choices – parents are in a unique position to deliberately mold their children’s financial attitudes and behaviors. And it all begins with talking and setting a good example.

Talking to your kids about money

Recent studies indicate that parents who regularly talk with their kids about money tend to raise much more financially responsible adults. Those parents also tend to encourage their children to set money goals and work towards those goals.

Setting a financial example for your kids

Just as important as talking to your kids about money is setting a good example – practicing what you preach. Children are keenly aware of hypocrisy and if you talk about living below your means but constantly don’t live that principle, your kids will take notice.

What behaviors should you model?

One study performed by Maritz, a sales and marketing company, found that financial achievers exhibited at least five of the following behaviors after opening an IRA or signing up to participate in an employer’s 401(k) or 403(b):

• Live within a budget such as YNAB
• Track and control expenses
• Save money by default
• Live beneath their means
• Regularly contribute to an employer’s retirement plan
• Pay off any debt in a regular, controlled manner
• Contribute to an IRA
• Deposit money in a savings account automatically

The difference was the magic number of five. Those who performed any five of these behaviors were on track for financial success. Maritz classified those who only participated in four of these behaviors as just “dreamers.”

The key is to have already opened that IRA or to sign up for your employer’s retirement plan. It all starts AFTER that.

Start your Scottrade IRA today and set the example for your children.

Parent’s have a far-reaching effect on their children in so many ways and the money aspect of a child’s life is no different. By talking with your children about money and exhibiting the discipline to practice what you preach,  you’ll not only be financially better prepared in your own life, but you’ll potentially help your children learn the importance of being prepared themselves.

Links to products or services may be affiliate links. See my disclosure policy on the site or on my About page.

Last year at this time, I created a free calendar and gave it away here on The Wisdom Journal. After receiving several requests, I created one for 2012 and it’s now available!

So, it’s time to get your new calendar set up. If you use a day planner, here is a 8.5×11 inch model that costs you nothing but some paper, printer ink, and a three ring binder. And it’s pretty functional too with a heavy emphasis on goal setting and achievement!

The calendar is in pdf format. I use FoxIt as my pdf reader. You can download it here or just stick with the old standby – Adobe.

Free 2012 Calendar and Day Planner Download (pdf)

If you have trouble with the download, send me a message by my contact form and I’ll email one to you directly. Alternately, try using Firefox, Safari, or Chrome (I use Safari and Chrome). Those three seem to handle the download just fine, but IE always seems to have its nighty in a knot.

What you will get in your free download

There are 5 types of pages in this calendar:

1. A Monthly Page with your mission statement, your 3 to 5 year plan, a six month plan, a plan for the current month, and a monthly calendar. (this picture is last year’s model but you’ll get the new one)

2. The first page of your Weekly/Daily Plan begins with an outline of your weekly plan and “Square 2” activities that are Important but not Urgent. Notice that the first column has Daily Disciplines for the week. Always check your Daily Disciplines before you fill up the rest of your day with other “stuff.” What are those Daily Disciplines? They could range from meditation, to exercise, to reading your devotional. You decide!

3. Fill the second page of your Weekly/Daily Plan with the remaining days of the week, urgent things to take care of, and money activities.

4. A Most Important Tasks page. This page is designed to help you identify what really is important, why, your next steps, what you’ll need to accomplish them, and who’s help you’ll need along the way.

5. And finally, a Quarterly Accountability Page. The page helps keep you on track and helps you see the big picture.

How to assemble your calendar

Of course you’re free to assemble it any way you wish, but I put mine together like this:

1. Opening page is the December Monthly Page.
2. On the back of that page is page one of my Weekly/Daily Plan.
3. The facing page is the second page of the Weekly/Daily Plan and on the back  is page one (again) of the Weekly/Daily Plan. These pages continue like this for the course of a month. The last week of the month has page two of the Weekly/Daily Plan on one side and the Most Important Tasks (page 4) on the back.  It faces the next month’s Monthly Page and it starts over again.
4. Every three months, instead of the Most Important Tasks page, I have the Quarterly Accountability page and it then faces the Monthly Page for the next month.

It will make sense once you start putting it together, but if you have any questions, just ask me via my contact page. I’ll get back to you as soon as possible.

I’ve added some reminders along the way:

• Set up your online bank account (consider a rewards account like PerkStreet).
• Update or create your will.
• Review your car insurance needs.
• Buy your tax preparation software.
• Get your first, second, and third credit reports from www.annualcreditreport.com.
• Deadlines for establishing a Simple IRA for the self-employed.
• Reminders to read great articles from The Wisdom Journal archives.
• And many more.

I hope you enjoy using this frugal alternative to an expensive day planner! Let me know how it works for you.

Links to products or services may be affiliate links. See my disclosure policy on the site or on my About page.

Risk bothers almost everyone to some degree but to maximize your returns, you’ll have to incur some sort of investment risk. The key is to know how much risk YOU can tolerate and work from there. Even in a turbulent market, however, there may be ways for even the most risk-averse among us to increase our investment returns. If you want to increase your returns without increasing your risk, ask yourself these five questions:

1. Where do you stash your cash?

I’m always amazed at people who keep large amounts in non-interest bearing accounts. I was a bank teller when I was in college in the 80′s and would regularly deal with people who kept $50,000 to $100,000 in a checking account. A non-interest bearing checking account. It blew my mind!

If you have large amounts sitting in liquid accounts earning nothing in interest, there is no increase in risk to move those funds to interest bearing accounts like Ally Bank’s Raise Your Rate CD or even an ING Direct savings account.

If nothing else, move your money to a local credit union where you’ll earn better than average interest since credit unions function basically as a non-profit that returns any profits to its members.

2. Do you have high interest debt?

In yesterday’s article (Should You Invest While You’re In Debt?), I defined “high interest” as anything over 12 percent. If you have debt this high, it makes no sense to put money into a savings account earning 1 percent when you’re paying credit card interest of 18 percent.

Don’t neglect building and maintaining an emergency fund with six months of expenses, but do put off your investing activities until that high interest debt is paid off. Like one of the commenters, Don, said yesterday, “Getting a 12+% return in the market is not easy to do, but paying down your debt that charges you 12% guarantees you that return.”

Where else are you going to get a return like THAT? Read How To Earn 20 Percent On Your Money – Guaranteed

3. Are you controlling your investment expenses?

Expense control while investing is crucial. While some gurus pooh-pooh the whole idea, Alan Roth explained it perfectly in his book, How A Second Grader Beats Wall Street.

• You’re paying far more in fees than you realize.
• You cannot predict where the stock market will be in [insert ANY length of time here].
• Wall Street gurus don’t know either. They’re just really good at convincing others that they know what they’re talking about. Remember that most “experts” were advising us to buy Lehman Brothers and Wachovia (among others) just days before they collapsed.
• The fees and taxes we pay cause our real returns to shrink to a fraction of our perceived returns.
• Our biases (and our financial planner’s biases) can cause us to lose big money over the long run.

One of the best way to control your investment expenses is to invest in low cost index funds or exchange traded funds. Read Why ETFs Beat Individual Stocks.

Find a financial advisor that ISN’T biased at WiserAdviser.

4. Are you putting your money where it makes sense?

Beware of the radio and television gurus who are big on telling you that they know what’s best and to only invest in [fill in the blank]. What is right for one person’s financial situation isn’t for another’s and there is NO way to tell based on a 30 second phone call. One size never fits all.

Remember: gurus aren’t rich because they saved money, or cut up their credit cards, or bought rental houses, or bought and sold discounted mortgages. They’re rich because they convinced regular people to send them money in the hopes of realizing a dream. Get a good expert’s opinion … one that actually is certified to give it.

5. Are you utilizing ALL legal tax advantages?

I was told by a wise man once: “Son, it isn’t what you sell, it’s what you keep.” If you’re not utilizing every single tax advantage to your favor, you’ll be keeping a lot less. Consider moving your taxable money into tax deferred bonds or tax free accounts like a Roth IRA. Additionally, make certain you only invest in tax efficient accounts that are passively managed. Actively managed accounts buy and sell (churn) their stocks far too often. This churning generated taxes that lower your overall return.

With just some small tweaks, you can potentially increase the return you’re currently getting on your money without incurring more risk. And increasing returns without increasing risk is the pinnacle of investing!

You can’t increase your returns until you have an investment account!
Click HERE to get started with Scottrade today!

Links to products or services may be affiliate links. See my disclosure policy on the site or on my About page.