First Person: Prioritizing Our Financial New Year

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You may have outlined, set or even started on your New Year’s resolutions, but this still may not mean you have a clear vision for how to proceed with meeting these resolutions, or even which are the most important in the hierarchy of your resolution list.

I typically have multiple resolutions heading into the new year, but just having them doesn’t always set me on the right path to achieving them. Therefore, I like to put some priority to my list in order to keep my resolutions organized and on track.

Here is what I consider when setting priorities regarding my financial New Year’s resolutions.

Timeframe to Implement

One of the most important factors in helping me to prioritize my resolutions comes in the way of determining the timeframes involved in the implementation of those resolutions.

For example, finding two new forms of income is one of my resolutions for the new year. Finding those income streams could be easy, but actually building them into any sort of meaningful income flow could take weeks or even months. Therefore, starting on this resolution as early into the new year as possible can provide me with the necessary timeframe to not only find those income streams, but build them as well.

Financial Impact

If a particular financial resolution will have an immediate impact upon my personal finances, either through cutting costs or increasing income, it will likely behoove me to get that resolution accomplished as soon into the new year as possible. This way, I can realize its effect for a longer period throughout the remained of the year.

Going back to my new income streams example, if I can get those extra income streams up and running in February, rather than say, June, I’m not only giving myself extra time to build those income streams into something meaningful, but three or four more months for those income streams to earn me extra cash.

Long-term Affects

But just because a particular resolution won’t make me an instant millionaire, doesn’t mean it’s not worth doing. This is why I put the long-term affects of my resolutions mid-way up the priority list.

While a certain resolution such as beating last year’s budgeted numbers or increasing my income by 20% might not have much of an effect in the near-term since they’re year-long resolutions, over time, they can have a significant impact upon my overall success for the year.

Feasibility

It’s often difficult to know whether a New Year’s resolution is going to be feasible until you’re actually well into the year and have worked on it a bit. However, that being said, as I develop various financial resolutions, I generally have a pretty good idea regarding the likelihood of achieving them.

For example, this past year has been a relatively good one for keeping expenses low. Therefore, as I set a goal of coming in lower on the new year’s budget than last, I know my chances of doing so are minimal; however, this doesn’t stop me from trying. More than anything though, my realistic approach to resolution achievement helps me to stay focused on other, more important resolutions, while still working toward others, but not wasting too much time on those that may not be completely within my grasp.

Progress as I Move Forward

A lot can change in the course of a year. Just because I’ve outlined and prioritized certain resolutions for the new year, doesn’t mean I won’t be adjusting those resolutions as my situation progresses or changes.

I may be making too much progress on my resolutions, or too little, or my situation might change so much that it makes my resolutions moot. Therefore, by continually evaluating my resolutions as I move forward, I can adjust them where needed and re-prioritize them if necessary.


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