Personal Finance Advice

It’s January. If you live anywhere in the USA, you are probably cold right now, at least at the moment of this writing. That means that you are probably inside and have plenty of time to think about things. Stop! If you start thinking, you may arrive at a New Year’s resolution that you have no realistic intention of keeping.

I understand that with the beginning of the New Year, there are a lot of psychological factors that may make resolving to be better, to live better or to act better, seem like a good idea. Indeed, Madison Avenue recognizes it too because the advertisements and sales that I have seen of late all seem to point in that direction. If you walk into a book store, you will likely encounter a display of self-help and fitness books. Today, Amazon is offering hourly deals on fitness equipment. Gyms are waiving membership fees.

Face it, if all of the ads are correct, we are a species in decline.
That may be the case, and I certainly do not want to discourage anyone from trying to improve themselves. Nevertheless, quick decisions at the beginning of the year often result in wasted expenditures that will be regretted for the next eleven months. Before you resolve to live differently, ask yourself the following questions:

Will My Resolution Cost Me Any Money? What do you want to do differently? If your resolution is to give up something, that may save you money and you may have nothing to lose by doing it. For example, if you want to give up eating red meat, your meat bill may decline. On the other hand, how will you replace the protein in your diet? Every decision that you make has the effect of a stone thrown in a pond. There will be ripples. If you resolve to start exercising, will you need to join a gym? Buy equipment? Purchase new clothing? Know the costs of your resolution before you commit to it.

Do You Have the Real Ability to Meet Your Goals? Exercise is great. Eating a healthier diet is a good thing. There are a lot of lifestyle changes that we all should consider. Before you tell yourself, and the world, however, that you are going to make a lifestyle change, ask yourself how you can actually accomplish it. If you are working twelve hours each day, you probably do not have time to go to the gym regularly. It may be that exercise for you needs to mean walking to work or using the stairs instead of the elevator. Don’t commit to a gym membership if you are never going to have time to go to the gym. Don’t buy a weight set if you are too exhausted to pick up a barbell when you get home.

Think “Gradual.” If a resolution requires that you spend money, and you think that you can accomplish it, look for ways to gradually adopt the resolution. If you resolve to bike to work, you may find that you can borrow a bicycle from a friend so that you can actually find out whether you will use the bike. If you bike to work consistently for a month, you will have a much better chance of using a bike that you then go out to purchase.

Think “Second-Hand.” As with most purchases, you can often find self-improvement products available used. Be patient in looking for whatever it is that you might need. There are many second hand sporting goods stores, for example, and you can let the sales staff know what you want so that they can alert you when it becomes available. If you cannot wait for used merchandise, look for the sales that are so common at this time of year.

Change has to come from within so making a resolution is not nearly as important as making an intelligent decision to change one’s way of life. Part of that decision-making should include cost considerations. If you are trying to give up smoking or alcohol, the cost savings can be great and that can be a motivational tool. If, on the other hand, you want to start exercising, you can usually find ways to test yourself without spending a lot of money in doing so. If you want to join a gym, make that the reward for doing sit-ups and push-ups at home for a week or a month. Don’t make it the motivation to start exercising, because that rarely works.

Have you resolved to live differently this year? Will it cost you money or save you money? What have you resolved?