Power Through Newness: New Year! New Goals! New You!

New Year! New Goals! New You!

Hope your new year is off to a great start! Are you still excited about what the year has in store for you? And maybe you have started playing with the new canvas the new year gifted you as we talked about in steps to a new beginning. The old things are gone, now is the time to reset and start afresh!

You may have decided on what areas of your life you will focus on this year for transformation. That is great! I hope you are taking a fresh look at your financial health as part of your plan. Looking at various areas of your life as buckets of your holistic health can be beneficial. Using the word financial health reminds me of the importance of taking care of my personal finance like I would for my physical health.

Physical health is a good image to use because impacts to our physical health are easily seen and usually given quick attention. In contrast, other areas of health like financial and mental health tend to remain hidden even when they are festering and suffering damaging effects because the effects are not immediately visible. Oftentimes, it’s not easy to trace things back to those areas of your health quickly, so there’s denial and bandages applied to symptoms instead of the root cause.

Financial Health

Health is like money, we never have a true idea of its value until we lose it.

Josh Billings

I was recently reminded of the saying “health is wealth”. It took a treatment that was not cheap and totally avoidable to get that reawakening. The truth is that before things got to needing treatment, I knew I needed to stop and make changes to the potential health issue I was neglecting. It was nothing big, but it was important. And like many things important, I pushed it to the back burner, dedicating time to things I regarded as more urgent, more demanding, or simpler to deal with. Well, it added up and my neglect came back to hunt me prompting my reflections on holistic health in all areas of my life.

Worse still, when the warning signs showed up, I, unfortunately, ignored them. Of course, nature has a way to make sure you give it attention. So, I was finally driven to a stop – literally, I couldn’t move my arm, and that, got my attention. And, there I was, spending money, experiencing pain, and working on fixing the problem.

This experience got me reflecting. Could changing my language about personal finance get more attention? What if I took it more seriously like my physical and mental health? For one, all the areas of health are interrelated. Just like my physical health was creating a dent in my pockets, my mental wellbeing was tanking as well.

What is Financial Health?

Financial health is the state and stability of an individual’s personal finances and financial affairs. Some typical indicators of good financial health are a steady flow of income, expenses that do not outpace income, and positive cashflow. The immediate sign of poor financial health is stress. Once stress kicks in, there is more disruption in life.

To determine your financial health, here is a quick self-assessment from Investopedia.com to assist you:

• How prepared are you for unexpected events? Do you have an emergency fund?
• What is your net worth? Is it positive or negative?
• Do you have the things you need in life? How about the things you want?
• What percent of your debt would you consider high interest, such as credit cards? Is it more than 50%?
• Are you actively saving for retirement? Do you feel you’re on track to meet your long-term goal? 
• Do you have enough insurance coverage—whether it be health or life?

Financial Goals

In managing your financial health, identify one priority to focus on. You do not need to work on all the items identified above at once. There is power in focusing on one thing. Think about the one thing that once you master it, will have a massive impact on other areas of your financial stability. When setting goals, it’s important to have a vision of what things will look like in the long run. Once you have a clear vision, a practical approach to getting your vision will involve short-term, mid-term, and long-term goal setting. Focusing on one thing at a time will help you achieve your short-term goals, then mid and long-term goals subsequently.

Sometimes, to identify the one thing can be challenging. Everything on your list may need attention, however, focusing on all of them at this time will be counterproductive. You will not see the results you hope for and that may be demotivating. With your financial health, you may have identified several areas from the self-assessment that you have to fix – for example, saving for emergencies, paying off debt, and growing your income.  All these are things that can be fixed and picking just one at a time, will give you the best results. To pick one, ask yourself the following:

• What is my current situation?
• What is working right now in each of these areas?
• What is not working?
• Which one of these if resolved or near completion in the next 3, 6, or 9 months will give you a big boost in your overall health and outlook?

I love to tackle low hanging fruits first. I also love simple. I have found that we often look for and toil on big solutions while ignoring the simple solution which is right under our noses. I am confident that if we spend some time, quieten the chatter within and outside while listening attentively to our inner voice, we will discover the answers and solutions which are already in us. This is not special and reserved to a few, it’s a gift we all have as humans. Philippians 4:13 says: “I can do all things through him who gives me strength.”

I can do all things through him who gives me strength.

Philippians 4:13

Getting from A to B

Congratulations! You have identified the one goal to work on in the short-term, bearing in mind that this builds up to your long-term vision. The next question is: How do you get from your current state to the desired place within the next 3 to 9 months?

The short answer is habits. By creating systems in your environment and automating things, you free up the energy you spend on working your willpower which is futile. Willpower, though amazing depletes and ever more so when it’s overworked. In contrast, a system (think automated, as this is better), does not require your will power. It just does the work especially if designed very well.

For example, if I choose to focus on building my emergency fund over the next 9 months. This in itself hits multiple areas of my financial stability and overall health. The benefits include:

• Minimizes the stress of worrying about unexpected events. Huge win! When there’s an unexpected event, I have a head start in tackling it.
• Growth in my savings habits. Once I start this habit, it’s easy to replicate for other savings goals I could initiate in a few months down the line.
• Increase in net worth. With more savings and less borrowing, my net worth increases. Net worth is the difference between what you own and what you owe. The higher your net worth, the more financially stable you are.
• Positioned to take better decisions. Having a head start means that my panic levels are reduced when faced with an emergency. Taking decisions in a panic leads to poor choices.
• Better sleep, emotional and mental health & wellness. I feel at peace when I worry about the future.

To reap these benefits, the system that helps me will involve:

1. Setting up a new savings account in a bank separate from the bank I do other transactions.
2. Deciding on an amount to transfer to the new account on a regular basis.
3. Setting up a regular schedule for transfers to the new account.
4. Automate the transfers.

Your financial health is important. By giving it immediate and priority attention just like you would give your physical health, you save yourself lots of pain and money.

• Do the financial health self-assessment.
• Identify one area of your financial health to focus on.
• Set up an automated system to help you with this habit as you effortlessly achieve your goal.
• Do it again for the next goal.

Cheers! You did it! Here’s to a financially healthier you in the new year!

Feel free to share your comments below!

Thanks for reading.

Blessings.