This is the year to reach your savings goals

Behavioral economists provide tips on how to improve the odds of reaching your goals. Now that the initial New Year's Resolutions  have faded, it's time to get serious about reaching your financial (and other) goals with the help from research. About half of people who make these resolutions fail to achieve their goals. Now there is research-based help.
Source: "This may be the year you reach your savings goals" by Anne Tergesen, The Wall Street Journal, 12/28-29/19.

1. Set financial goals in January or on your birthday. Research shows these are good times to initiate change. Both wipe the slate clean and mark the start of a new year.

2. Set specific, realistic goals. Example: "I will increase my 401(k) contributions by 2%/year for the next 5 years."

3. Make a detailed written plan. Break your goal into small steps and get started.

4. Stress test your plan. "Behavioral economists recommend an exercise called mental accounting, in which people think about a desired outcome and why it matters." Ex. I am saving 15%/year so I can retire by age 67.  Identify obstacles (buying frequently on Amazon) and brainstorm solutions (stop Amazon Prime subscription and disable one-click shopping).

5. Use behavioral strategies. Automate your savings!

• Make "if-then" plans.
• Reward your successes. Treat yourself when you've stuck to your plan for 6 months.
• Use temptation bundling. Listen to an audio book while exercising; enjoy your favorite beverage while Reviewing monthly spending. 
• Use behavior therapy. "Identify triggers of bad behavior and substitute alternative rewards." 
• Use mental accounting. Save for separate goals in individual accounts. Have a visual reminder of each goal. 
• Set occasional high impact goals. Set one month as a save as much as possible/spend as little as possible. This is similar to the alcohol-free January. 

You Need a Game Plan to Get Out of Debt

• Procrastination only makes situation worse
• Even small steps make a difference

Paying off debt can seem insurmountable. But that debt can prevent saving for retirement, prevent homeownership, and negatively affect overall financial security in addition to lots of stress.

The more you procrastinate the larger the debt grows with compound interest. Start today to set a firm plan to reduce debt.

1. Get Organized
Understand how much you owe to whom and what the relative interest rates are. Start with a spreadsheet listing all your debts from highest to lowest interest.
Focus on eliminating the highest interest rate debts first.

2. Commit and Take Action
Get family members to support and participate in the effort.
Unless you are single you need to recruit other family members to join the effort.
Change your perspective from negative to positive: you can accomplish this goal. You are not a bad person because you have debt; you have lots of company but that's no excuse for ignoring what is best for you.
Set up automatic payments to pay down the debts.
If you have medical debt, try to negotiate with the provider BEFORE the debt goes to collection.

3. Set SMART Goals and Reminders
Make the connection between your long term financial goals and why you want to pay off your debts.
Set SMART goals: specific, measurable, attainable, realistic & time-specific. 
What picture visually represents your goals? Pick a picture and place it on your mirror where you will see it each morning. Pick another visual to keep in your wallet where you will see it before you spend. 

Start a Spending Plan and set SMART goals

 A spending plan gives you control in 6 simple steps with help from FINRA.
http://www.saveandinvest.org/MilitaryCenter/MilitaryFinancialToolkits/MakingEndsMeet/P124805?utm_source=MM&utm_medium=email&utm_campaign=Investor_News_042612_FINAL
Learn how to set SMART goals: http://www.saveandinvest.org/MilitaryCenter/MilitaryFinancialToolkits/P124801