Financial progress comes second only to goals around diet and exercise when it comes to New Year’s resolutions, and yet, many folks don’t know where to get started when it comes to mapping out a financial future. While most of our resolutions understandably tend to be proactive, there is often just as much to be gained from excising a bad financial habit as there is from adopting a new, positive one. With that in mind, we’d invite you to consider this list of potential financial do’s and don’ts for the new year: 

21 Resolutions for 2021:  

  1. Spend less than you make, period
  2. Work with an advisor to create a formal financial plan
  3. Own the world: Diversify within and between asset classes
  4. Splurge, but only infrequently, to maximize happiness
  5. Read at least one book per month
  6. Invest in your mind and skillset
  7. Spend money in ways that increase happiness: Charitable giving and time with loved ones
  8. Automate every part of your financial life
  9. Teach someone else about the power of saving and investing 
  10. Learn to savor and appreciate what you already have
  11. Save at least 1% more than you did last year
  12. Check out your credit report
  13. Declutter: Get rid of everything you don’t use or love
  14. Make a (realistic) budget
  15. Track your net worth 
  16. Make one extra mortgage payment 
  17. Create a “vision board” with your three top financial goals
  18. Set bite-sized financial goals with rewards for completion
  19. Choose experiences over stuff
  20. Rebalance at least yearly 
  21. Have fun and buy only things that matter to you—you can’t take any of it with you!

20 Things We Are Leaving in 2020: 

  1. Benchmarking to the S+P 500. 
  2. Keeping up with the Joneses 
  3. Chasing speculative fads and pretending it’s an investment 
  4. Conflating negativity and bearishness with sophistication
  5. Unnecessarily complicated products
  6. Confusing a place to live with an investment 
  7. End-of-year price targets and specific forecasts
  8. Raising lifestyle when income rises
  9. Reaching for yield
  10. Watching histrionic financial news coverage
  11. Depreciating assets 
  12. Confusing our desire for an asset with its future trajectory
  13. Talking about 10% corrections as though they are rare
  14. The idea of getting rich quick 
  15. The illusion of certainty when it comes to markets (or life, for that matter) 
  16. Unnecessary consumer debt
  17. Co-signing loans 
  18. Short-term thinking 
  19. Sacrificing health and happiness for a paycheck 
  20. Assuming that the future will look like the recent past

We hope these recommendations help you start your new year on the right financial foot. Looking forward to a successful 2021!

 

3486-CLS-12/31/2020