WS Chronicle

By JaNet Adams

Another January is upon us and the famous sentence, “New Year, New Me,” is being said by countless people. This sentence is usually used by an individual who is openly declaring that what happened in the past year is not going to happen in the new year.

They are not going to be associated with individuals that mistreated them. They are not going to eat the same food that kept them from reaching their weight loss goal. My favorite is that they are going to be much better with their money than they were last year.

The issue with declaring “New Year, New Me” is that we tend to say it each and every year, which means we are not accomplishing the goals we set for ourselves. I can’t help you get the wrong people out your life or share meal plans for your weight loss journey, but I can help you move forward with your finances. 

The goal for your finances should be to build a foundation and then move up from there. You should not be starting your financial journey over at the beginning of each year. If you find yourself doing that, then it means you did not have a plan. 

This year that will not be your testimony because here is the plan.

Take inventory

How are you going to begin building a stronger financial foundation if you don’t know where to start? You will need to take inventory of your finances in order to take the necessary steps towards financial freedom. That means taking the time to look at your bank statements as well as your bills and seeing how much you owe other people. Also

research how much money you have in the bank or money you have in your home if you keep money there. You can add up the money in your investments (401K, 403B, IRA, etc), but remember that this money is not liquid and not easy for you to withdraw without paying a fee or taxes.

You will not be able to set goals like paying off a certain amount of debt or saving a certain amount of money this year if you don’t have the correct numbers from the beginning. Take out a piece of paper and total up the amount of money you owe to people and put that number under the word “debt” on your sheet of paper. Then calculate the amount of (liquid) money you have and on your sheet of paper put that number under the word “money.” After you do this, you now have a financial baseline.

Set Realistic Goals

I am sure you have heard that you should set BHAG (Big Hairy Audacious Goals), but I am not recommending you do that while setting your financial goals. If you were to set financial BHAG, then that could be you saying “I am going to save $20,000 this year” and you have never saved more than $2,000 in a year. From this example you can see you are setting yourself up for failure.

I want you to set realistic goals that stretch you. Using the same example, if you have saved $2,000 before in a year, then this year make the goal $4,000. $4,000 is a realistic goal that still stretches you to make changes in your fnances.

Remove Distractions

Distractions can destroy everything you are working hard for and therefore must be removed. Start off with looking at your email inbox. Remove yourself from every mailing list that causes you to spend money. Reach out to friends/coworkers that you know who ask you to go out to eat multiple times a week and tell them that you are reducing your “eating out” budget. If you have found that social media causes you to spend money so that you can keep up with the latest trend, you may want to remove those apps from your phone. Remove anything that is a threat to your future financial freedom.

Taking these steps will ensure you are not in the same place financially come this time next year.

Ja’Net Adams is a financial strategist, author, as well as the owner of EMACK Consulting LLC, a financial wellness and economic development firm. Her firm provides a financial literacy curriculum to high school and college students. They also provide financial wellness programming to corporations and government entities.