Or is it?…

New year, new me… come on y’all. You say this every year and where does it get you? Nowhere because the ‘new you’ wears out by February 1st, if you are lucky to last that long… 

Every new year, you set these goals to improve yourself: lose weight, save money, or try to become a better version of yourself. That is great and all, goals are important, but I think the reason why we don’t succeed with these goals every year is that even though we have determined that these are goals we desire to achieve, we have not defined our why. Your why is what drives you to reach for success. It is more than “I want to”. It is the reasoning behind the goals in the first place. Your why is: 

  • Why do you need to achieve these goals
  • What is driving you to want this goal for yourself 
  • What makes you want more for your life

This year as you set (or reset) your goals. Think about your why. 

  • Why you want to save money- So that you can travel or have enough money saved so you don’t have to stress about small financial decisions 
  • Why do you want to lose weight- So you don’t have health issues
  • Why do you need to improve your mental health ( (read: a lot of yall need therapy to get over some of these burdens you are facing to move forward but we will leave that discussion to the professionals)

These reasons why are what will drive you to actually achieve your goals. 

Thinking about your why is what will drive you to do what needs to be done, when you simply just don’t want to, along with discipline. Remembering your why will help you put your bank card back when you are in the mall contemplating buying shoes that you don’t need (me, many times over). So sit and think about your why in terms of your money, why you need to save money, why do you want to invest, and why you need to create a budget. Get deep about it. 

Don’t just say I need to do this for my kids or because I want to have more money. Truly think about why you need to do it for your kids. Is it so they don’t see that you are stressed bout finances?; Is it so everyone can enjoy family vacations together?; Or so you can help them prepare or pay for college.

For my people without children, what is your why? Is it so you can travel on a whim?; So you can quit that job your hate so much (you know, F U money, or mad money- that just doesn’t apply to relationships)?; Or maybe it is so you can bring stability to your life and not stress over your finances. 

Really think about it. 

When people say money can’t buy happiness, that. Is. A. Lie. Those people likely already have money. Can it buy you love or genuine relationships? No. But it can buy you options. The option to be stress free financially; the option to do whatever you like without it becoming a financial burden; the option to pay that miscellaneous bill that always comes when you don’t have the extra money; or the option to remove yourself from situations that are not beneficial to you. Money creates options and choices that can drastically improve your life for the better. 

So I’ve blabbed enough. How do we set these goals, at a granular level, to determine our why. Here are a few goals that I see on repeat every year (usually because they didn’t stick the year before):

  1. Save money
  2. Pay off debt
  3. Invest

These are great goals but not specific enough. 

  1. Save money 

You want to save money, but how much and why? Why do you need whatever amount you’ve decided on. The amount that you have decided, is that enough or is it feasible to achieve this amount in the allotted time period? What is your strategy to save this money? With your current budget, can you save this money or will you constantly have to dip into your savings account throughout the year because you are not budgeting or your budget is not set up properly. If you don’t have a budget that should be your first step before any of these because you won’t have a system for tracking or maintaining your finances.

  1. Pay off debt

A lot of this reasoning is answered under #1 as well. Why can’t you pay off the debt? 

Is it because you need this money to supplement your income every month or you are still spending as you are paying it off? And I am not talking about the people who pay their credit cards off every month in full (this ain’t for you!), but those who are drowning in debt. Drowning is relative to your income. For someone making $40,000-50,000/yr,  $10,000 in debt is a lot. Whereas someone making $100,000, for them drowning could be $50,000. But that doesn’t matter, don’t diminish any one’s struggle because we are all trying to climb out of this craziness together. So before you come up with a strategy to pay off debt whether it’s the avalanche or snowball method determine why you are constantly in debt, why it never seems to get paid off and is constantly growing. Consider, why do you feel that credit cards are necessary or a good way to do your spending. Don’t get me wrong, credit cards are beneficial BUT you need to be strategic, so that it does not result in overspending, and the debt can be paid off. 

  1. Investing

Ok, you want to invest but you have no idea where to start, which is not individual stocks if you are a novice, I can tell you that. There are so many types of investment vehicles before you get to individual stocks that help to grow your portfolio. I can’t lie, I cringe when I hear people say, I want to invest in stocks to get dividends. Ok average Joe Schmoe, that shows me right there that you are not knowledgeable enough to invest in stocks (yet!), to think that is the place to start, because often times you need hundreds of shares to see dividends that will bring you the return you are expecting. I know I am being harsh abut YOU. NEED. TO. LEARN. And then once you do you will understand why I said that. The first place most of you can start investing is within your retirement accounts. I don’t want to hear NADA about you buying individual shares and you have not balanced your retirement account or worked with an investment advisor to do that. A retirement account in simplest terms is an investment account that you can’t touch until 59 1/2, at the earliest, without penalty, for the most part. START THERE. Invest a percentage of your paycheck and get your company match. Let me repeat again: GET.YOUR.COMPANY.MATCH. It’s free money and they owe you anyway for showing up to work in the first place.  Also, let me add 3-5% is not likely going to get you to your dream retirement, depending on your income or length of working. So let’s work our way up to 10% or to the IRS max for that year— This can be done over time, not all at once, so don’t worry. If all other areas in your financial life are in tact, this goal is feasible. I really don’t want y’all eating cat food in retirement.

After you get your retirement account set up or adjusted, here are your other options for investing that are not individual stocks.

  1. Mutual funds
  2. Index funds
  3. Exchange Traded funds (ETFs)
  4. Education accounts (for those of you with kids). If you already have one of these for your kids, please do the same and review the portfolio and make sure it’s doing what it needs to do, or in finance ling: performing as expected. 
  5. Bonds

Last bit about individual stocks: Individual stocks are like the dessert. It is a treat after you finish your meal. It is not intended to be your entire dinner. (I heard this a while ago, don’t credit me with this sage wisdom).

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