Martha Myron

Forget resolutions, just set one clear goal

  • Savings goal: organised saving can allow you to get on track (File photograph)

Hmmmm. It is now day five of brand new year 2019. You’ve just experienced another hectic year-end deadline at your job; you may have children and you’ve shopped and spent to meet the holiday expectations; you’ve laid out the red carpet for all the relatives, making them happy. Quite frankly, you are exhausted.

Already, those new year’s resolutions are looking practically unachievable any time soon.

Do you think your holiday expectations were too exuberant?

Don’t feel bad. We all do these things.

After all, who ever said that you had to “turn over a new leaf” every year. Yet, taking a positive view, contemplating annual resolutions means that we have faith and confidence in ourselves — to meet physical and mental challenges in the future.

The new year resolution trend always appeared to be a crafty marketer’s ploy to increase consumer consumption, such as gym styles, equipment, memberships, diet plans, philosophical educational tools, emotional attitude counselling, architectural redesign to revitalise quality living spaces, and so on.

However, more than 5,000 years ago in resolution, the ancient Babylonians made promises to their gods at the start of each year that they would return borrowed objects and pay their debts.

Prescient and amusing, that last sentence, don’t you think?

We humans haven’t evolved much, if at all. We are still facing those credit card bills after the holidays, while we hurriedly return unwanted gifts.

So, since the vast majority of your 2019 resolutions have already been discarded anyway, what can you do now?

Firstly, quit feeling frustrated because you failed to see them through. Be kind and give yourself a break.

Remember, we humans are amazing creatures, yet, we continually underestimate our motivational resolve. We would not as a race still be here, if our remote ancestors did not persevere, again and again, against the most unimaginable challenges ever.

But, you still want to do something constructive, so.

Keep your goals simple.

Keep them small (and attainable).

Truly, just set only one goal.

Four different categories are listed below. Pick one, otherwise, you will be overwhelmed. Try it out, see if you can be consistent in achieving it. I bet you can make your goal work.

Your first goal, might take you a year to really ramp up, but once in place, it will become a habit. Then, you can think about trying another goal — whichever has the most priority in your life!

1. Try the 1 per cent — 2 per cent savings of salary goal.

I’m a big believer in building a cash cushion, real liquid money that can be accessed if needed. A cushion keeps stress-related worry to a minimum. Some may find this goal tough, because as soon as that cash cushion accumulates, a family emergency arises setting them back to almost living paycheque to paycheque, or if a bit flush, the urge to splurge overwhelms good intentions.

Assuming an individual annual salary of $60,000, 1 per cent is $600 saved, then $5,000 monthly at 1 per cent is $50.

Yes, the scoffing starts. What’s the point! Only $50, but we are starting small, remember? Plus, if both individuals in a relationship achieve this goal, then the sum is doubled.

• Open a savings account at your bank. Request that your employer deduct/deposit this amount from your gross paycheque each month. If that benefit is not available, the minute your paycheque is deposited, move $50 to your new cash cushion account. Do this each and every month.

• Bermuda National Pension Scheme. You and your employer are putting away 10 per cent total of your salary every month into your pension plan, that’s a mandatory $250 from you and $250 from your employer. Increase or start your voluntary contribution by 1 to 2 per cent or more, each month. Your savings goal is started.

2. Expense control on daily living costs.

Grocery costs can be reduced, if careful.

Consider reducing purchases of the following, such as:

• Processed foods.

• Non-food edibles — junk food. Little nutrition for many calories.

• Smaller portions for everyone. Same amount extends further.

• Eliminate soda and other soft drinks, drink water, make your own iced tea with inexpensive tea bags.

• Buy in bulk — encourage neighbours, friends, relatives to share cost of bulk items, i.e. rice, flour, oil, and so on. Have a cook-a-thon and share delicious items with everyone. Tout up those grocery savings and add to your new cash cushion pot.

3. Healthy living.

Stress can impact anyone in their daily lives. Take up walking, slow and short, the faster and longer as you get used to the exertion. Walk, walk, whenever and wherever you can. Every day that you accomplish this healthy positive action, put $1 or $2 in your cash cushion jar. Feeling flush that day, make it $5. Add the health living to your new cash cushion pot.

4. Debt.

Sometimes, debt is regarded as very destructive, but such a serious topic cannot be generalised. Mortgage debt is undertaken to own an asset. Credit card debt may accumulate, too, but have you bought an appreciating asset like a home? Credit card debt must be paid promptly.

Remember the rule of 72. Divide the credit card interest of say 20 per cent in 72, and in a little over three years that debt amount will double, the challenge to reduce it to zero is huge.

This may all seem like trivia, but what we all tend to forget is that every single small action impacts our daily lives. Every single penny we accumulate in our figurative piggy bank adds up; your determined actions can restart your path to financial independence.

That’s it — just a few simple goals. The savings all adds up.

Can you meet this challenge? I know you can!

In the Related Media box next to this article you will find a pdf of The Bermuda Resident Savings Tips List 2019, showing many expenses that can be reduced.

Readers: please let me know what your biggest cost challenges are and write to me about how you are managing your finances. Note that reader responses are always confidential.

Readers, Happy New Year.

Martha Harris Myron CPA CFP JSM: Masters of Law — international tax and financial services. Dual citizen: Bermudian/US. Pondstraddler Life, financial perspectives for Bermuda islanders and their globally mobile connections on the Great Atlantic Pond. Finance columnist to The Royal Gazette, Bermuda. All proceeds earned from this column go to The Reading Clinic. Contact: martha.myron@gmail.com