• Peter Fowler

As we start a new calendar year, take time to pause and reflect


This tends to be the moment when we also make new resolutions for the year ahead. For context, a resolution is a firm decision to do or not to do something. And, the making of a resolution can often be sparked by our need or want, upon reflection, to seek positive change in an area of our life.

This may be especially the case when reflecting on the 2020 calendar year. The 2020 calendar year was a year unlike any other in recent memory-testing us financially, physically, mentally, and emotionally over an extended period. The flow-on effect of policies implemented to combat COVID-19 (e.g. social distancing and restrictions), saw many of us experience a reduction, or loss, of our earnings (work and/or investment-related). We may also have been more cautious with our spending, despite our earnings remaining the same. This may have been due, in part, to our concern over the state of the economy and rising unemployment-pointing to a possible reduction, or loss, in our earnings in the future. In both instances, this may have shone a confronting light on our existing strengths, weaknesses, opportunities, threats, values and priorities-and shown us where change was required. With this in mind, we discuss personal finance-related resolutions below. Personal finance-related resolutions When it comes to personal finance-related resolutions, this can encompass many different things such as earning, spending, saving, investing, donating, and paying off debt. Potential resolutions could include to:

  • earn more money

  • goal: upskill or retrain in your chosen profession with X course


  • spend less money

  • goal: reduce your personal and household bills by $X per week


  • stick to a budget

  • goal: use a budget tracking tool to help stick to your budget of $X per week


  • save more money

  • goal: save $X per week in a separate high-interest savings account or in super


  • donate more money or time

  • goal: donate $X or X hours of your time this year to your chosen charity


  • pay off debt

  • goal: pay off an extra $X of debt each week, or $X this year


As you can see, we have also included goals. This is in recognition that resolutions can often fall by the wayside without thinking about and planning how they can actually be achieved.

Also take stock of, and reflect upon, your existing circumstances (financial situation, goals and objectives) regarding areas of your personal finances, such as your:

  • investments

  • superannuation

  • estate planning

  • debt management

  • insurance planning

  • cash flow management

By doing this, you can zero in on specific areas where you need or want positive change. However, before you get started with making your own resolutions, and setting your own goals, it's important to understand that resolutions aren't often achieved. For example, in the context of New Year's resolutions, roughly 36% of us tend to 'throw in the towel' in the first month of making our resolutions-and, when all things are said and done, 88% of New Year's resolutions fail. There can be a number of reasons for this, such as the wrong mindset, poor time management, unrealistic expectations, undesirable habits, getting distracted with life, or ill-defined (or no) goals and objectives. As such, you may find that using the SMART principle for your goal setting proves beneficial, for example:

  • S for Specific – What goal do you want to achieve? And, why?

  • M for Measurable – How will you track your progress towards your goal?

  • A for Assignable – What do you, and others, need to do to achieve your goal?

  • R for Realistic – Is your goal achievable, given your available resources?

  • T for Time-based – When will you expect to achieve your goal?

Additional inclusions can be 'E for Evaluate' and 'R for Re-adjust' (SMARTER)-these can be important in terms of tracking your progress towards achieving your goal and making changes when appropriate. Moving forward 2020 was a challenging year, testing us all in one way or another. Let's take the insights gained and lessons learnt, and put them to good use-moving forward in a positive direction: "The new year stands before us, like a chapter in a book, waiting to be written." (Melody Beattie)

"For last year's words belong to last year's language, and next year's words await another voice." (T.S. Eliot)

"What the new year brings to you will depend a great deal on what you bring to the new year." (Vernon McLellan)

Collins Hume together with Essential Wealth and Retirement is always ready to help, so please contact us on 02 6686 3000 if we can be of any further assistance. The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial adviser to consider whether that is appropriate having regard to your own objectives, financial situation and needs. Whilst Essential Wealth and Retirement Pty Ltd is of the view the content of this website is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed, and no warranty of accuracy or reliability is given or implied. Therefore, no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd or any officer, agent or employee of Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd.

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