Don't Panic If You Didn't Bank in Money on 立春—Here's A Better Solution For You

If you saw snaking long queues at banks and cash deposit machines last Thursday, well don’t worry, there wasn’t any special promotion you missed out. It’s that time of the year for a curious little practice by the Chinese to bank in money at auspicious times on 4 February or 立春, the start of Spring on the lunar calendar. It is believed to be a lucky practice that will grow one’s wealth for the New Year.

While this may be a case of “no harm trying” or “better follow than be sorry”, why not take some more concrete steps towards your financial goals for the year? It’s still not too late to set yourself on track and instil some good practices to keep your New Year resolutions about money.

Here’s how you can:

1. Write down simple goals and
2. Prioritise and set a simple action plan.

1. Write down simple goals

The very first step toward any goal setting is to define your goals! Like Lewis Carroll says, “Any road will get you there, if you don’t know where you are going.” What do you really want to create for yourself, your family? What is your vision of an ideal life?

There are common categories of financial goals, such as savings, debt management, retirement planning, wealth creation etc. They don’t have to be big hairy audacious goals but simply something you want and can commit to working towards. They do, however, need to be SMART goals. Let’s address the first 2 letters of that SMART goal—Specific and Measurable.

So for example, rather than saying “Pay off my education loan”, it should be “Pay off 30% of my total education loan by December 2016”. Or your goal to “Build an emergency fund”. This can be a big sum so you can break your goal into smaller actionable steps, such as “Accumulating 30% of my emergency fund of $XXk in 2016.”

After defining your goals, the next step is to write them down. Don’t underestimate this little act of putting thought to paper. Articulating your thoughts into words helps to clarify your intention. Studies have shown that those who wrote down their goals accomplished more than those who did not write down their goals. It also helps to have them on record for the purpose of reflecting on your progress at the end of the year or for reference in setting your future goals.

2. Prioritise goals and set a simple action plan

You will find that when you seek to make your goals Specific and Measurable, they will also tend to become Achievable and Realistic. Like building a 5-figure emergency fund. The thought of that is daunting. But when you force yourself to articulate that goal with S and M in mind, you find that you will adjust your expectations and timeline. Set yourself up for success by creating goals that are Realistic in an Achievable Time-frame.

At the same time, you need to prioritise which goals are most important and work towards those first. For example, accumulating more debt while seeking to build an emergency fund is not too wise. In this case, it might be better to prioritise paying off the debt you have first before setting aside money to contribute to an emergency fund.

All these will affect the action plan you need to set for achieving those goals. This plan can actually be made up of simple tasks you do on a daily, monthly basis. Here are a few examples:

• Set monthly budgets the first of every month to track my budget, expenditure and savings;
• Allocate 20% of my monthly salary towards paying off education loan;
• Set up a separate savings account for my emergency fund and seed it with 2 months of salary this year.

Some other tasks that may not directly contribute to any specific goal but nonetheless keep you on track for financial prudence can also be defined, such as paying off credit card bills every month, having a salary bank account that has no ATM card or GIRO facilities, setting up a separate spending bank account that you transfer funds to monthly, using your credit card only for grocery etc.

3. Celebrate small achievements

I did not mention a step 3 earlier on but yes, reward yourself for hitting small achievements along the way! Celebrating our successes can remind us why we wanted this in the first place, our vision. This will provide the motivation and serve as a driving force when things don’t go as planned or when the road is bumpy.

Remember, it’s not too late to start. It doesn’t matter where you begin, it’s where you finish.