As we bid farewell to 2014, many of us are making New Year's resolutions. What about you? Do you hope to save more, spend less, or pay off debts in 2015? If so, you're not alone. When consumers are surveyed on their New Year's intentions, financial resolutions often figure at the top of their lists. However, as we all know, making a resolution is a lot easier than keeping one. That's why we've asked our resident New Years' resolution experts, Pam Wilson and Donnie Collins, to tell us what it takes to succeed. As financial coaches at Consumer Credit Counseling Service of Maryland and Delaware (CCCS), they regularly help clients set and achieve personal finance goals. Hopefully they can also help us make our financial resolutions a reality this coming year.
Wilson says the first step to keeping a financial New Year's resolution is recognizing it's a long-term commitment. "People often start the year with great hopes, but lose faith in themselves as the months go by. If you want to succeed, you need to have realistic expectations and maintain a sense of enthusiasm throughout the year."
Both financial coaches believe New Year's resolutions are more achievable if they're based on carefully constructed goals. How can you develop a workable goal? Wilson says, "Take some time to think about what you really want to accomplish. Then write your goal down and evaluate it using the SMART system. Is it specific, measurable, attainable, realistic, and timely? If not, you may need to make adjustments or consider a different goal."
Collins says planning is also paramount to financial resolution success. "You can easily say you want to save $2,000 this year, but in order to reach that goal, you will need to save about $166 each month. Unless you already have an extra $166 lying around, you'll probably need to make some changes, and that's where a plan comes in."
When financial coaching clients are faced with this scenario, Collins guides them through a set of questions, starting with "Does allocating $166 each month for saving sound reasonable?" He then helps them take a look at their budget and establish a spending plan to follow. He emphasizes, "If the spending plan is followed, the goal will be much easier to reach."
Wilson agrees. "Breaking things into small, attainable steps makes the process less overwhelming and more doable, so clients are more likely to achieve their goals."
Both Wilson and Collins acknowledge that when it comes to goal keeping, hurdles are likely to arise. Wilson says, "This is the point where you need to revisit your goals and readjust."
Collins emphasizes, "Hitting your head from time to time is natural, so it's important not to get discouraged. Focus on possible solutions instead of the problem." When clients encounter obstacles during financial coaching, he helps them take a look at the whole situation, identify what's not working, then brainstorm ideas to get them back on track. "I like to remind clients of the joy that comes with small victories. Overcoming a bump in the road now makes the end result all the better."
Wilson says that sometimes support can make the difference between failure and success. "During those times when change is needed, it's good to have someone there who can act as your cheerleader and advocate to provide you with the strength to move forward and reflect on other options."
Collins notes that this is one of the advantages clients receive from CCCS of Maryland and Delaware's financial coaching program. "Support is an integral part of the financial coaching initiative and one of the most important aspects of our job. It's always good to know that someone is in your corner. Between sessions we check in with clients about specific items that may be an issue for them. We also provide resources that may prove useful during their journey."
If you have financial New Year's resolutions in mind, but need a bit of help, CCCS's financial coaching program may be just the ticket. At clients' initial coaching session, they are matched with a personal coach who works with them the entire program. Over the course of a year, clients learn to set financial goals, make and follow action steps, and evaluate their own progress. When they encounter hurdles, their coach provides encouragement and helps them find new strategies for completing their goals.
What's the best thing about CCCS's financial coaching program? Wilson believes it offers clients structure and a wealth of resources. "We are able to help clients make their dreams a reality and refer them to other parts of the agency if they need help with specific issues like debt reduction or homeownership."
Collins says, "This is a client-driven process. As coaches, we don't control the steering wheel - you do, but we can provide a road map and show you the quickest, smoothest way to get where you want to go."
This link provides further information about the CCCS financial coaching initiative. While the program is in its pilot phase, it is currently free of charge. To learn more or schedule an appointment, contact Wilson and Collins at 1-800-642-2227 or [email protected]. With a little help, you CAN achieve your personal finance goals, making 2015 a very Happy New Year!
