A lot of us start the New Year by setting resolutions based on goals we’ve been meaning to get around to achieving.
You know the goals I’m talking about: “I will lose weight,” or “I will save more money.”
Unfortunately, every year, many of us lose track of such goals quickly because something derails us from committing.
We have to ask ourselves: is this a goal that we really value and want to attain, or is it a goal because it is something we have been told we “should” do?
At a recent Women’s Circle, participants learned how to craft a personal financial policy to have an established framework to rely on when it comes time to make decisions when you’re stressed, conflicted, or tempted.
The “should” goals don’t work a lot of the time because we don’t have the personal “buy in” that is needed to commit to change and actually make the goal a reality.
Then there are the times when our good nature is exploited by people around us. Are you the “go to” person when another donation is needed or when an event needs a chairperson? Everyone knows you will say “yes,” so they continue to ask, and you continue to feel more and more stretched and taken advantage of.
If you recognize either of these scenarios, you are not alone. There are many reasons why things like this may happen, but there is one solution we’d like to propose: craft one for yourself.
Personal financial policies are powerful decision-making mechanisms that can be put in place to give you a logical way to make decisions of all types, in changing external conditions—these mechanisms remove the emotions that have the tendency to derail us from what we really want. Policies are not goals, values, or action items; policies help translate our goals into action items.
Here’s an example: Jane Smith has a heart the size of all outdoors. She is a “giver” and wants everyone to prosper. Once her entrepreneurial spirit and hard work provided her with a nest egg that would allow her to be comfortable for the rest of her life, she started hearing about monetary needs from extended family. At first, Jane wanted to help and did give some family members money to sort through a financial crisis that had come up. But that hand extended over and over again, with one crisis after another. Jane started to feel taken advantage of, then felt guilty because she didn’t want to help anymore.
What can Jane do in order to protect both her nest egg and her relationship with her family?
Jane’s Observation: My family members look to me for financial support.
Jane’s Goal: Encourage family members to be fiscally responsible.
Jane’s Policies: I will provide my family with financial literacy support. I will not provide family members with financial support.
Jane’s Action Items: I will help family members research local debtors anonymous groups, debt counselors, and other resources. I will encourage my family to seek assistance from a financial planner, whether through a consultation or through a free financial planning day at the local library.
Create one or two financial planning policies for yourself in order to attain that goal that has been eluding you for years.
And then you’ll be back to your regularly-scheduled day, having learned a few wise things, and hopefully leaving with a greater sense of your own decision-making power.
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