It happens to the best of us. We set a massive, life-changing goal on January 1st, only to feel the sting of defeat a few weeks later. It's not because you lack discipline or drive; it's usually because the goal was too big and undefined to fit into your actual life. Let's look at how we can flip the script this year by turning those daunting mountains into a series of "can-do" steps that you'll actually want to take.
Resolution 1: Think big and start small with your 401(k)
This is the perfect place to start because it allows you to break a massive objective down into tiny, manageable steps.
You should treat your 401(k) contributions like you're training for a marathon. You wouldn't wake up and run 26.2 miles on day one. You would start with a mile, then two, and build up slowly. You can do the exact same thing with your savings.
The power of 1%
Here is a concrete example. You could start by directing just 1% of your paycheck into your employer's 401(k). Suppose you make $60,000 a year. That works out to $50/month, or just $25 per paycheck if you're paid twice a month. You likely won't even notice that $25 is missing, yet you're officially saving for the future and potentially grabbing an employer match.
The ramp-up strategy
Next, set a date on your calendar. In a few months, bump that contribution to 2%, which is just another $25 per paycheck. Then, set another date to bump it to 3%. A great trick is to increase it every time you get a raise or a bonus. You won't feel the difference in your lifestyle, but one day you'll look up and realize you're saving 10% or more of your salary. You'll be surprised by how much you have accumulated after a few years of these small wins.
Resolution 2: Take three easy steps to organize your finances
When you have a clear picture of your finances, you have a clear head. That clarity allows you to make smart money decisions without the stress. Getting organized is always a smart move, but saying "I need to get organized" is too vague.
The three-step breakdown
We can break this into three specific actions.
- Create a checklist.
- Assess (or reassess) your goals.
- Decide what actions to take, one goal at a time.
We have resources that can walk you through this process step-by-step. The goal is to take a big, scary topic and break it down into smaller pieces you can knock out over time. Once you're organized, you can map out your milestones, life events, and major purchases with calm confidence. Your financial planning team can be a huge help here.
Resolution 3: Spend your money intentionally
Intentional spending is about directing your money toward the things that matter most to you. It encompasses what you like, your specific goals, and what you value in life. It gives you a framework to say "yes" to the right things and "no" to the clutter.
Prioritize your joy
This requires getting your priorities in order. For example, you might place a high value on time with friends and travel. Your intentional spending would focus on funding evenings out, day trips, or perhaps an annual snowboarding vacation.
On the flip side, you might realize you have a bunch of subscriptions to streaming services, but you don't actually watch much television. Access to TV shows is nice, but if it's not a priority, you can cancel a couple of those subscriptions to fund the snowboard trip.
This gets to the heart of your personalized financial roadmap. The first step is always focusing on you and the life you want to live.
Resolution 4: Talk to your partner about finances regularly
Love and finances absolutely go together. When you build a life with someone, you are forming both a romantic partnership and a financial partnership. Managing money in a partnership can be challenging, but being on the same page is crucial for a healthy, long-lasting relationship.
The psychology of money
We can break this resolution down into three smaller steps too.
First, you need to understand the psychology of money. Many of the lessons we learned about money were absorbed as children, often without us realizing it. Taking a simple quiz can help you uncover how your past shapes your current decisions.
Build a shared understanding
Next, have your partner take the quiz so you can understand their feelings about money. Once you both have that insight, sit down for a chat. Map out your priorities together to ensure your decisions work for both of you.
Lastly, set a regular time to discuss finances. These talks can range from big topics like retirement investing to fun topics like planning a vacation. Your planning team can facilitate this to ensure it remains a productive part of your roadmap.
Resolution 5: Teach your children about money
This resolution naturally follows the last one. We play a huge role in how our children view the world. Kids start learning money habits from us as early as three years old. By the time they turn seven, they've formed many of their attitudes about money.
It's never too late (or too early)
If your children are older than seven, don't worry; it's not too late to start. You can mimic how financial planners teach their own kids about earning, saving, spending, giving, and investing. Open savings accounts for them and have age-appropriate talks about the family budget. Take them shopping and explain what you're buying, how much it costs, and why you chose it.
The Lego example
You can also introduce them to intentional spending. Let's say your kiddo has her eye on a new Lego set. You love doing Lego together, so it aligns with your family values.
Sit down and look at her monthly spending limit, her current savings, and the cost of the set. With that real data, you can make a plan together for her to get that set. It teaches patience, prioritization, and the reward of saving for something you truly want.
Why the Facet approach is different
We believe that financial health isn't about hitting a generic number; it's about living well. That's why we don't just hand you a static document and wish you luck. Our membership gives you access to a dedicated team of experts who help you navigate your entire financial life—from 401(k) contributions to family conversations about money. We charge a flat fee because we believe impartial, fiduciary advice should be accessible, helping you build a roadmap that reflects your values, not ours.
