Why You Shouldn’t Set New Years Resolutions

Why You Shouldn’t Set New Year’s Resolutions

Do you set New Years resolutions?

Do you set a goal to lose the 10 pounds you gained over the holidays every year? Have you been working towards a promotion for years on end? Have you told yourself you are going to take a vacation for 3 years in a row but still haven’t gone anywhere? If you set goals every year and fail – this is why.

Let me start out by saying that I hate New Years resolutions. I hate that we set amazing goals and never follow through to achieve these goals. I have worked in a gym or been a regular at the gym for about 15 years now. Every year the gym population increases drastically every January 1. The gym population then decreases rapidly by the end of January or February and is reduced to the tried and true regulars. Why is this? Why do we set goals every year and give up? This just makes us feel worse and we never go anywhere. I know that goal setting and New Years Resolutions are a big topic, so I will break it down into bite size pieces and give you actionable items to do today.

What are New Year’s Resolutions?

By definition, a resolution is a firm decision. New years resolutions would be great if this were really the case. In general, when we set new years “resolutions”, we are really setting passive hopes and dreams that we would like to see happen during the next 12 months. These are what I hate. Without a plan of action to break down your goals into bite sized micro goals, your “resolutions” will not be accomplished. The plan of action is what takes your overall vision of what you want to occur in your life and turns it into reality.

If you make these resolutions on New Year’s Eve, you are probably not in the right mindset to make an effective plan of action. For this reason, I like to make my New Year’s resolutions in November. It may take a few hours or even a few days to set your vision, goals and make plans. It is well worth spending a few hours setting the top 4-5 most important things you want to accomplish in the next year that will make you a better person or help you run your business more effectively. Goals that will chart the course of your actions for the next years shouldn’t be made on a whim.

At Molen & Associates, we use a system called EOS that helps determine our goal setting process. We spend a full day outside of the day-to-day of the business to plan once every 90 days. Once a year, we spend two days setting the vision and planning out the next years’ worth of goals. This may seem like a lot of time away from the day to day operations of the business, but it allows us to focus on what truly matters to the business and better serve our customers. Being able to set these goals is a skillset that improves over time. We tend to overestimate what we can do in a month, but underestimate what can be accomplished in a year. It is the small incremental changes such as habits make the biggest improvements over time and can be very influential in achieving goals. Continuing to reflect on our new year’s resolutions and by sticking to the plan you have set to will help you achieve your goals more often. You won’t always hit every one of your goals. As a business, we strive to achieve 80% of our quarterly goals. This may sound strange, because we obviously want to accomplish 100% of our goals but if we are continually hitting every goal you set, we are not stretching our limits and improving.

How to Set Goals Effectively

I like to think about my goals by category: Business, Personal, Family or Friends, Spiritual Health, Physical Health and Financial Health. I try to think about the 3-5 MOST important aspects of my life I want to improve on. After I have determined where I would like to improve, I think of why I want to improve on this aspect and what I can do to be better. This becomes the beginning of my goal. I’m sure you have heard of SMART goals – Specific, Measurable, Attainable, Relevant, and Timely. Rewrite the goal you had in mind to ensure that it is a SMART goal and you can hold yourself accountable throughout the year. Once I have a SMART goal in mind, I write down mini goals or steps that I will need to take in order to achieve my overall goal. Once I get these steps all written down, I can start to sense how long this goal will take and how much time I will need to commit over the course of the year. I know how many hours or days each goal will take and if there are any deadlines I need to plan for during the year to achieve my overall goal. My New Year’s resolution is no longer a distant and vague hope for the future – it is an attainable goal with a plan of action.  As I mentioned earlier, I like to make these plans in November, rather than at the end of the year. This allows me to truly commit to my goals and even start working on the before the end of the year. I like to review my goals weekly but also reevaluate on a quarterly basis to really think through my goals and make sure I am on track.

Let Me Give You an Example

If I want to start my own business as a goal for this next year. This is a very vague, complex and seemingly unattainable goal that will probably not be accomplished without following the goal setting and action planning process. First, I need to make it a SMART goal. “I want to start a residential cleaning service business in the Houston, TX area and have 20 clients by December 31, 2019 with a reoccurring monthly revenue of $6000.” Specific? Very. Measurable? Yes. Attainable? Once I set my plan of action. Relevant? Yes. Timely? Yes. Next comes our plan of action – What steps do I need to take in order to set up my business? Do I need to set up a website? How much will I charge? What type of marketing will I do to gain these first 20 clients? Do I need to talk to my tax professional to discuss what the tax implications will be of my new business? How will I take payments? For this example, the plan may be a rudimentary business plan with specific dates to achieve each step of the way. Once we have a plan of action to get us to the overall goal of starting the cleaning business, I start working and reevaluate every 90 days. If I start the year and I am still having trouble gaining clients, maybe I need to reevaluate my action plan and see if there is something I am missing or something I need to change to still hit my goal by the end of the year. It may help to share your goals with a significant other or someone that can hold you accountable.

How can we help you?

If you have financial goals that we can help you with, don’t hesitate to ask us to hold you accountable or help you determine which steps are necessary to achieve those goals. We offer financial planning and tax planning consultations for this reason. Planning is the key to successfully and legally reducing your tax liability and improving your overall financial health. We go beyond tax compliance and proactively recommend tax saving strategies to maximize your after-tax income.

We make it a priority to enhance our mastery of the current tax law, complex tax code, and new tax regulations by attending frequent tax seminars.

We want to help Businesses and individuals pay the lowest amount of taxes allowable by law by continually looking for ways to minimize your taxes throughout the year, not just at the end of the year.

We recommend Tax Saving Strategies that help you…

  • grow and preserve assets by keeping Uncle Sam out of your pockets.
  • defer income so you can keep your money now and pay less taxes later.
  • reduce taxes on your income so you keep more of what you make.
  • reduce taxes on your estate so your family keeps more of what you’ve made.
  • reduce taxes on your gifts so you can give more.
  • reduce taxes on your investments so you can grow your wealth faster.
  • reduce taxes on your retirement distributions so you can retire in style.

Here are just a few of the Tax Saving Strategies we use…

  • Splitting income among several family members or legal entities in order to get more of the income taxed in a lower bracket.
  • Shifting income or expenses from one year to another in order to have them fall where they will be taxed at a lower rate.
  • Deferring tax liabilities through certain investment choices such as pension plans, contributions and other similar plans.
  • Using certain investments to produce income that is tax exempt from either federal or state or both taxing entities.
  • Finding tax deductions by structuring your money to pay for things you enjoy, such as a vacation home.

Remember, we work for you, not for the IRS. Numerous clients save many times our fee in reduced tax liability through careful planning and legitimate tax strategies. Call us at 281-440-6279 to schedule your appointment today.

 

Clark Boyd

General Manager

 

 

Post and ideas inspired by Podcast Episode 855 of Omar Zenhom’s 100 MBA. For more information listen here.

By | 2018-12-17T19:48:32+00:00 December 30th, 2018|Tax, Wealth Management|Comments Off on Why You Shouldn’t Set New Years Resolutions

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