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5 actionable habits to achieve your 2022 financial goals

Last month, you read about 8 financial habits that could help you find good fortune in the year of the tiger.

Starting the year off on the right foot is an excellent way to re-focus on your goals, but maintaining these goals in the long term is often the true challenge.

The Covid-19 pandemic has taught us that the unexpected can certainly hamper your plans. You might have had all sorts of dreams and goals heading into 2020, that may have needed to be side-lined in the wake of a global crisis. You could have let your good habits slip away, leaving you less disciplined than you used to be.

So, when it comes to getting your new year’s resolutions to stick, you might need some help. Indeed, even before the pandemic, people struggled to maintain their commitments – Statista reports that, back in 2019, only 8% of people kept their new year’s resolutions up for a whole year.

Read on to find out five actionable ways to maintain your financial habits throughout this year and beyond.

1. Focus on the “why” not the “what”

By now, you are very familiar with what your financial goals are for the year ahead.

You might have a target amount of money you’d like to save into your pension, or perhaps you want to buy a bigger home.

However, as life gets in the way and other stressors take priority, your financial goals might seem to become less achievable as you are distracted by more immediate issues.

That’s why focusing on the “why” not the “what” is crucial. If the “what” is your goal, the “why” is the reason for your goal, your emotional attachment to that goal.

For example, you may want to buy a bigger home because you want to grow your family, or you may be trying to save a certain amount into your pension so that you can enjoy a more comfortable retirement.

By focusing on the “why” – the emotional drive behind the “what” – you might feel more motivated to stick with the goals you know can create a more profitable, fun and healthy life.

2. Modify your environment to facilitate your habits

One key reason many people don’t stick with their habits is because other factors cloud their vision before they form a new habit.

You might have a money-saving goal in 2022 that has been impeded by your other commitments, or perhaps is difficult to reach due to your bad spending habits creeping back in.

Instead of berating yourself for not being more disciplined, it may be more helpful to curate an environment in which your good habits are more easily facilitated.

For example, if you want to save more in 2022, why not set up a bank standing order to send the amount you want to save each month to another account BEFORE you spend it, or schedule an appointment with your financial planner.

By modifying your environment in a way that forces you to meet your commitments, you might have a better chance of achieving, or even exceeding, your 2022 financial goals.

3. Aim for the next step in your journey, not the end result

One of the greatest lessons you can ever learn in life is to focus on the process that will achieve your goal. If you have set yourself a financial goal this year that is now seeming harder and harder to reach, it might be wise to stop thinking about the end goal altogether.

Instead, you should focus on the next step in the process. Want to sell your home this year? You can’t go straight to the end result – packing up and moving out. You need to take the next step, which might be to have your home valued, or to complete renovations in order to make it more appealing to buyers.

By chipping away at the very next thing on your list, you may find your progress to be startlingly fast, because you aren’t wasting time being daunted by the seemingly insurmountable task in front of you.

4. Find a way to love your new habits

Research published by Healthline claims that you have to do something 66 times before it becomes a habit.

When it comes to financial habits, though, the process might be a little more complicated.

Ultimately, your financial habits will be a mixture of “reps” – repeatable actions, such as saving money as soon as you get paid rather than waiting until the end of the month – and long-term strategies that take a long time to play out, such as judiciously investing in assets that could grow your wealth over time.

However, as we all know, long-term consequences are hard to focus on, so you need to find ways to enjoy the process of repeating your habits.

For example, if you bought a wall calendar and placed an “X” on it each day that you made a step towards one of your goals, you will soon begin to see a beautiful chain of “Xs” on your wall. This immediate sense of satisfaction might spur you on to keep maintaining these good habits – otherwise, you could find your motivation dwindling as the year goes on.

5. Vote for the kind of person you want to be

James Clear, author of the bestselling book Atomic Habits, claims that “every action is a vote for the type of person you wish to become.”

So, when you make small yet consistent changes to your financial habits on a daily, weekly or monthly basis, you are essentially voting for the financially healthier, happier and more stable person that you want to become.

Grand, sweeping gestures don’t form habits, but small, seemingly insignificant ones do. If you feel overwhelmed by the financial goals you have set for yourself, try breaking them down into smaller and more manageable chunks, so that these seemingly “difficult” habits become instinctive and natural to you in the future.

Get in touch

One way to stick to your habits is to consult a professional who can help you steadily work towards the end result you want to achieve.

If you are in a rut and require help meeting your financial goals, or if you need guidance on any other financial matters, please get in touch.

Email info@bmpwealth.com or call +852 3975 2878.

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