Forget Resolutions – Live Strategically

It’s that time of year again!  We create resolutions to make changes in our lives, hopefully to bring about a better new year than the previous.

Fast forward a few weeks or maybe a month and we have crashed and burned on our resolutions. Motivation is gone and the list is in the trash under the pizza box and a couple of wine bottles from last night.  It’s a week in, are you holding strong or are your resolutions already re-scheduled for next year?

The memes about failing on resolutions or working on resolutions from years ago are floating around as a reminder that resolution failure is pretty much universally expected. We accept that resolutions are expected to fail, and it is a running joke.

So why is resolution failure so common?

Often, it comes down to making resolutions that we really don’t want to do.  If we wanted to do them, it would be easy.  However, we want the benefit of doing them.

Let’s look at a common list of resolutions:

• Lose Weight
• Quit Drinking
• Quit Smoking
• Get Out of Debt
• Save Money

Let’s face it, very few of us want to actually do those things.  We want the benefit of having succeeded at doing those things. However, that list of resolutions is a great big bag of suck, nothing at all to look forward to working on, just being done with.

We make our goals the undesirable actions needed to achieve our true goals.  Talk about a way to drain away the motivation right from the start!

Alright, I’m sure people will want to argue with a few of these, so let’s dig in a bit deeper.  Some might argue that they do in fact want to “Lose Weight”.  I would suggest that what you really want to do is be more fit and healthy.  Losing weight is hard work, it involves sacrifice, it is not fun.

Is this just a play on words?  Yes, it is. However, it is different from a psychological perspective.

This really matters!

So many things in life are much harder because we don’t have the right perspective or frame of mind to stay motivated.

Living Strategically

The word strategy or strategic has become a buzz word that is misused and overused.  It’s getting a bit worn out, but underneath it all, there is real meaning in the word.

Strategy is not a vision, a mission statement, a financial plan, or a set of goals.  It is not an adjective that gets added to a plan to make it sound more important.  While it is used that way quite often, that just dilutes the meaning.

Strategy is about action, otherwise it is useless fluff.

The best way to explain is with a couple of examples.  I have two primary goals for 2019, so let’s start with those.

Goal 1 – Reduce my financial stress and increase my financial flexibility.

Goal 2 – Improve my overall physical and mental well-being.

These goals are high level and fairly non-specific.  They are not actionable, so I need to bridge the gap between the goals and how to accomplish them.  That involves identifying the challenges that I have to reaching each of those goals and determining specific actions that will address the challenges and help me reach those goals.

Goal 1 – Reduce my financial stress and increase my financial flexibility.

Critical Challenges:

• I have a negative monthly cash flow. I am spending more than I make, much of it is not discretionary.  It is not wasteful spending on fancy dinners, entertainment, or just buying stuff.
• My current debt load is very high, much of it is high interest credit card debt. This is a result from having to maintain multiple households during the divorce process, periods of unemployment, and extensive legal fees.

Goal 2 – Improve my overall physical and mental well-being.

Critical Challenges:

• The constant financial stress of high debt and negative cash flow is mentally exhausting.In fact, it becomes very hard to become motivated to be productive because of the mental strain.  This can create a downward spiral.
• Tight finances have me cutting back on my own meals and nutrition, which leaves me lacking energy and motivation. It also impacts my ability to get exercise, because of the physical exhaustion.

These are big hairy challenges.  How am I going to reduce my debt load if I have a negative cash flow?  I can’t pay down debt when I am constantly incurring more. In addition, the growing debt is increasing my cash flow problem because I have to keep paying more interest every month.  It is compounding and not in a good way.

This also impacts my second goal, my financial situation is causing immense stress and impacting my ability and motivation to engage in healthy lifestyle choices.

High-Level Financial Summary

My top priority is to become cash flow positive, so let’s take a high-level look at the situation.

• Costs on Former Martial Home (mortgage & utilities) – 40% of Net Income
• Divorce Related – 40% of Net Income
• Current living expenses (rent & utilities) – 30% of Net Income
• Automotive expenses – 7% of Net Income
• Debt Minimums – 25% of Net Income
• Discretionary Spending (Food, Clothing, etc) – 10% of Net Income

That is over 150% of my net income or take-home pay.

My current total debt load exceeds my annual net income.

I think this qualifies as a crisis situation.

If you want to make real changes in the quality of your life, treat those changes with the gravity of being a real problem.

This is a drastic, but very real scenario, it is my current reality.  I hope that you are not facing a situation quite as complex or daunting as this one.  However, the point still stands, fluffy resolutions will not help address real problems.

What does it mean to live strategically?

1. Define your goals.
2. Identify the critical challenges to meeting them.
3. Build a specific action plan to address the challenges.

This builds the mental linkage between what you must do and what you actually want.  It is what provides the motivation to do the hard work, because the focus is on the prize, not the work itself.

In my next post, I’ll detail my action plan.  There are a number of decisions and a lot of detail that make it worthy of standing on its own as a separate post.  I will then follow-up periodically to talk about my progress and how well I am able to follow my strategy and how well it works.