New Year’s resolutions recently came up in a meeting. While I’m impartial to resolutions, I was reminded that being purposeful in setting intentions throughout the year with small changes can lead to big results over time. However, actually acting on those changes can be tough.
I thought back to when we purchased our Peloton (a home-exercise bike for those uninitiated). It was in 2017 in preparation for a big 100-mile hike around Mont Blanc. I wasn’t getting in enough cardio to be in “mountain ready” shape, so I hired a personal trainer. She helped me define my goal, map out an exercise plan with strength training and cardio (hence the Peloton), and set up regular check ins.
These steps sounded familiar. Advisors use a similar process with clients to build a financial planning roadmap. We help define goals, understand where they are now, clarify what’s most important, and then build out a specific customized plan of action to get from here to there. When a plan truly speaks to someone’s deepest goals and values, you get engaged and motivated. You’ll move mountains to make it happen.
Recently, I recommitted to getting back on the Peloton in 2020. The following steps were helpful in setting me up for success, and paralleled my journey as an advisor. Here’s what I learned:
- Set Goals – the clearer the goal, the more likely it’s accomplished. During Shelter-In-Place I initially set my Peloton goal to join the Century Club, or 100 rides. I found myself wanting to ride each day. Some days it was longer rides while others were just about getting on the bike for 10 minutes. But each day I showed up, it got easier. On the financial side, I often hear “I should save more.” Get specific, for example: “I want to save $X dollars per month,” which makes it more likely to happen.
- Develop A Clear Roadmap – once you’ve identified the action to take, create systems and routines to help implement and eliminate the need to make decisions in the heat of the moment. For biking, I decided each day I’d ride right after I finished work. Within the financial realm, we call this decision-making framework; establish the action plan ahead of time when you’re in a calm state of mind and set up automated systems to implement. Structures to automate financial decisions might be auto savings each month, establishing a stock price point at which to exercise or sell options, defining target thresholds of when to rebalance your portfolio to maintain the appropriate risk-reward profile. This way you aren’t trying to make an important decision when the market is way up or way down and emotions can adversely impact decision making.
- Find An Accountability Partner – while we all inherently know it’s good to work out regularly, it is hard to go at it on your own. This is why people hire personal trainers and financial advisors. You could probably do it on your own, but partnering with a subject matter expert can help get you to the finish line more effectively and efficiently. A trainer or advisor can be a valuable sounding board and a guide you can turn to when the going gets tough. They also hold you accountable for making progress over time.
- Connect With A Like Minded Community – beyond a trainer or advisor, surround yourself with people who are like-minded as a support system. I found connecting with other Peloton friends virtually and riding together meant we cheered each other on and celebrated milestones along the way. Finances are often a taboo subject with friends. We’ve found hosting virtual Women’s Conversation Circles on various financial topics is a great way to bring like-minded women together in a safe space to learn, share, and feel more empowered about finances.
- Recalibrate and Recommit – After accomplishing my 100+ rides last year, I took a bit of time off. This is where Mental Fitness comes in, capacity to respond to life’s challenges with positive rather than negative mindset. If you didn’t fully finish or complete a prior Challenge, shake it off and start anew. Revisiting and recommitting to goals regularly keeps them top of mind. When it comes to personal finances, we suggest outside of formal meetings, clients schedule Money Dates to revisit high level goals and financial roadmap, and assess current progress.
As humans when we think about change – whether it’s exercise, finance or otherwise – it’s tough for our Current Self to make sacrifices for the good of our Future Self. As author James Clear says in Atomic Habits, “every action you take is a vote for the type of person you wish to become”. What are you willing to commit to now in service of your future self?
Sabrina Lowell’s mission is to help clients feel like they have a solid framework for making informed financial decisions during times of transition. Paired with technical expertise, Sabrina brings the Certified Professional Co-Active Coach® (CPCC) designation to her work with clients via a systematic process of active listening, helping clients form and articulate goals, facilitating conversation, and discovering “ah ha” moments. As a newlywed herself, she also enjoys working with career engaged couples to communicate openly about their finances and shared financial goals. Contact her at privateocean.com.
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