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Forget Financial New Year’s Resolutions – Do a Review! Thumbnail

Forget Financial New Year’s Resolutions – Do a Review!

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Transcript Below:

Speaker 1 (00:07):

Welcome back to 30 Minute Money, the podcast that delivers action oriented smart money ideas and little tiny bite size pieces. Today, joining me in our beautiful ROC Vox studio, Rochester, New York. My name is Scott, by the way, is, uh, my favorite super financial superhero, Mr. Steve Weshing from Focused Wealth Advisors. How are you today,

Speaker 2 (00:27):

Sir? I'm well. I need that, I need that shirt with the big S on it, you

Speaker 1 (00:30):


Speaker 2 (00:30):

 for Steve.

Speaker 1 (00:32):

And, and, um, just so you know, he hung his cape up outside in the lobby,

Speaker 2 (00:36):

, but what you can't see is I got my leotards on. So , I'll just leave you with that image. Thank you, .

Speaker 1 (00:42):

Yeah, that's, now we know how this podcast is gonna go, . That's

Speaker 2 (00:45):

Right. Exactly.

Speaker 1 (00:47):

. So, uh, so being that this is the beginning of the year, and, you know, all the buzz is always around. This time is always New Year's resolutions and what you're not gonna stick to, that's right. After two weeks of setting your resolution,

Speaker 2 (01:00):

New year, new me, new

Speaker 1 (01:01):

Year, new me, and that also carries over to your, your fiscal resolutions and your, your desires and stuff. But you have a different kind of approach to that. It

Speaker 2 (01:12):

Does. It does. And so a lot of people's New Year's resolutions have to do with money. So, and we strategically time this episode because, um, we're, we're hoping that it's gonna be released right around the time that everybody's just about giving up on all their news resolutions. , we, we, we didn't wanna do it on, on January 1st because people say, no, I can do this, I can do this. You know, I got this great re And so now that, you know, you're facing the reality of, you know, it's, it's, you know, you go to the gym the first week of the year and the place is packed, and you go to the, go to the gym the first week of February, and it's like a ghost town. So, um, so we wanted to talk about a better way to approach this rather than doing resolutions, um, because, you know, many, like, there, you, you, you've experienced it, lots of people have experienced it, and there are studies out there, you know, when people make resolutions, make New Year's resolutions, most of them don't stick mm-hmm. . Um, and, uh, but one, one actually that, uh, that I, I, I've looked at some of those studies and one that made me giggle was one from, um, stata.com, uh, that said that 21% of people this year are resolving to spend less time on social media. And we know that that's not real until you've posted it on Facebook . So, so we know that one, one

Speaker 1 (02:26):

More. Oh, the irony.

Speaker 2 (02:27):

Exactly. . So, so it's, it's a little bit like, you know, uh, we talk about financial goals and how financial goals, you know, there, there is a place for financial goals, but, but setting goals doesn't work in terms of getting you there. It's developing the right habits that will help get you there. So habits are more important than goals. And instead of doing resolutions, what I'm gonna suggest is that you do a review, um, because that can inform the habits that you develop. So I take inspiration for, for this episode from, uh, a Tim Ferris podcast episode where he talks about doing a, a prior year review. So he doesn't talk as much about setting goals for this year or doing resolutions, but what he, what he's taken to doing is, um, spending a little bit of time at the end of the beginning of the year and looking back over the prior year.


And what he suggests is that you take a piece of paper and you draw a line down the middle, and on one side you write positive on one side, you write negative, and then you go through your calendar for the prior year. And you look at, at look at it week by week. And for each week you jot down on that paper, um, any, any people, any activities, um, any, any commitments, any things that you do that triggered a peak experience and you put that in the positive column or, um, if, if it was, you know, set you off in the wrong direction, you'd put that in the negative column. And then once you've gone through the entire year, you'll look at it and say, so what 20% of each column produced the most powerful, uh, peaks or most powerful results? And that, and that's what you base looking forward on.


And so you, you take the, the biggest positive influences and you try to figure out what kinds of things you can do to replicate those more often in the new year. And there's, there's more to it. It's a great post. We'll put the link in the show notes so that you can go and see it. But I, I, I read through that and I thought that would be a great thing for your financial, uh, planning as well for your financial thing. And so I'm, I, I would start in the same place, take a piece of paper, draw a line down the middle, create positive and negative columns, and then look at last year's calendar. But instead of just peak experiences, um, take a look at things that had some influence over, you know, so that had something to do with your money. Something to do with your financial life. Did you make a big purchase? Um, you know, did you, do, you know, do something else that influenced your, your financial life? Um, did you make not just an in, uh, a major purchase, but did you make any impulse purchases that you particularly remember? Not a tiny little thing that doesn't cost much money, but something that you've spent some real money on that you really didn't think a whole lot about. And so

Speaker 1 (05:09):

What would I put that Dogecoin investment on the negative side or the positive

Speaker 2 (05:13):

Side? ? Well, I, what'd you, what does your statement say these days? Right, ,

Speaker 1 (05:16):

There is no

Speaker 2 (05:17):

Statement. Oh, there it is. Okay. I guess it goes in the negative. You might also take a look at, at, at events, things that happen, unex an unexpected expense or an unexpected windfall. You could take a look at those things. Those things can have a big effect on your financial life. Um, you might have come across an unexpected opportunity. Um, you might have been able to, to buy something at a, at a big discount that you didn't think you were gonna be able to, um, you know, so, or, or you may have made a decision, um, that you were able to execute. Um, maybe you bought something in a different way, you know, you found a new way to buy something in a way that was gonna cost you less money or something like that. And make a list of those things on that same pad.


And then, and then take a look at what those, you know, what those experiences were and, and, and give a little thought to how that might influence, how it might inform how you would, how you wanna make financial decisions this year. Hmm. It may mean that, that you just approach things differently. Um, like if you, if you have to buy a new appliance for the home, um, you might take a look at how you did it last year, and you might say, well, you know, I, this is how I feel about that big purchase from last year. Maybe we should do, maybe we should shop around more. Maybe we should do more research. You know, maybe we shouldn't dole as much. You know, maybe we had to replace something in a hurry and that cost us a lot of money because we put off the decision too long. Whatever it is, just think about how that might influence your, uh, your decisions for the coming year. And see if you can't figure out how to work that into a way of doing things that might be more productive based on what you learned last year, rather than try to artificially create some kind of a resolution that's hard to stick with. Does that make sense? Yeah.

Speaker 1 (06:57):

How, how would you, how would you say that you go, so you're, you're, you're making your lists, but how, how do you classify things that happen that are outside of your control? So the market took a downturn or something happened, it's not necessarily a decision you made, per se, right? But it is something that negative, you don't want to go through that again, but how would you, how would you approach that?

Speaker 2 (07:22):

Yeah, well, you know what, what you wanna look at is how it affects you. So there's nothing you can do about the market going down. Now you might, you might say that, oh, well I had all of my money in internet stocks, you know, I put all my money in Dogecoin , and so maybe I wouldn't do that again. So I mean that, you know, if it affects you that way, yeah, certainly that, that that's, that's something that you could change. But what, what you wanna take a look at is, is how it affected you. So for a lot of people, the downturn in the market really more than anything else, just affects how they feel about things. And so, you know, you might reflect on, you know, how would you process an experience like that? Um, if you, if it prompted you to make an emotional decision, then you know, you might want to find an advisor to talk to.


Because a big part of the advisor's job is to keep you from responding emotionally to things that are going on in the market. But if you are retired, for example, and you're living on an income and that decline in the market had an, you know, may have compromised your ability to get as much money as you needed to from your portfolio, well that, you know, you might respond to that by saying, you know, maybe this isn't allocated the right way. Maybe I need to make different choices about this so I'm not as exposed to the stock market. Uh, but a lot of it is really just emotional. So yeah, those things that you can't control, um, you want to take a look at not those things, but you want to take a look at how it affected you. Yeah. Now the stock market is one thing because that's something you can't do anything about, but there are a lot of unexpected things that happen that are outside of your control.


And so you might reflect on how could I be better prepared for that? So maybe, you know, maybe somebody in the family, you know, wrecked a car, may, maybe they got in an accident and, and, and, um, and caused a big expense that way. May, maybe your furnace went out unexpectedly and you know, you weren't quite prepared for something like that. You know, you might reflect on not so much, you know, um, what would I do about that? You know, what, what, you know, what could I do to prevent my furnace from going out or to prevent from a, a car accident from happening? Right. Well, there's probably nothing that you can do, but you can be better prepared for it. So do you have an emergency fund set aside so that you know that you don't have to put the whole furnace on a credit card?

Speaker 1 (09:32):

Um, and what do you typically, I, I've talked about this before with other people in what, because traditionally this country is terrible with savings. Just people in general don't save enough. And I know that there's that sort of rule where you're supposed to have, what, six months or three months of, of savings Yep. So that you can survive and pay all your bills and Right. Everything for that amount of, of time,

Speaker 2 (09:55):

Three to six months, um, of expenses, three to six months of household bills in cash. Right. As an emergency fund.

Speaker 1 (10:03):

Yeah. That's  that's a challenge. That's, that's a real challenge for a lot of people. I know me specifically. Yeah. But,

Speaker 2 (10:10):

You know, so, so let's talk about that. What, what's a habit that you could develop so that you could get to the point where you have six months in cash?

Speaker 1 (10:17):

Well, you know, actually the emotional aspect is a big thing for me. So not responding to things, emotionally, knee jerk reactions, cuz those are often the wrong one. Or more costly, just like with anything, when you're gonna buy something. My wife, she is all about the consumer reports and she goes on anything she buys on Amazon, she's looking at all the, uh, all the reviews and the comments and stuff like that. Whereas I'm like, I need this, buy it, you know, very cave-like caveman, like, uh, but that's, that's how she approaches things. And I mean, that's a, that's something that I,  I try to incorporate that I've learned a lot from Yeah. From her about, so I could see that being the emotional aspect and not being, you know, a knee jerk reaction to, to something that happened. Yeah. We just, we just bought a new, we just got a new furnace because ours was 21 years old. So we were like, you know what? We looked it up and it turned out that most furnaces start crapping out at this time. Yeah. So we went and got a new one.

Speaker 2 (11:22):

We, we, I just got a new furnace as well, . And it was one of those where, so the decision was, you know, that we had somebody come in and take a look at it, and it was a, there was something on the circuit board that blew out. And he said, well, you could get the circuit board for $900 installed. You know, and that kind of, it's yeah.

Speaker 1 (11:38):

A really good circuit board . Um,

Speaker 2 (11:42):

Um, but we took a look at it and, and we, we, we realized it's a 16 year old furnace, right. It's warrantied for 10. And the guy said, look, you, you, you made the right choice when you bought this. It's a great furnace. They last about 10 years now. And so the, you know, so that caused us to step back and say, okay, well should we spend $950 now on a circuit board and run the risk that, you know, it could just totally fail in when, you know, thankfully it was like 40 degrees out when, when that happened. So it wasn't, it was an inconvenience, but it wasn't a crisis. Right. Yeah. If it were 10 below would be a crisis. Yeah. Because they couldn't fix it right away. But it's one of those where, you know, okay, well, so, um, we decided better to, to replace the whole thing instead of spending this amount of money now and running the risk that it was gonna, you know, tank at a time that was less opportune. And, and so, you know, we did it on an accelerated basis, but we talked to a couple of different places, got a couple different quotes compared specs between different kinds of things and made that decision.

Speaker 1 (12:43):

Yeah. What would you, what have you seen in your experience that people have, um, you know, done to improve, you know, when they're doing their reviews? Have you, is there gonna be examples of what people are doing?

Speaker 2 (12:56):

I'll, I'll share with you. Um, well, one of the things that I'll, I'll also emphasize is one really good habit to get into is figure out a way to track your expenses, figure out whether it's, um, a, uh, whether your bank provides reports or you have an outside application, like a Quicken or, um, uh, I wanna say it's a tivity, or there's a, an app that's, that's like that, but some, some kind of a, some kind of an application that downloads all the information from all your transactions and get in the habit of taking a look at that maybe once a month or two, just so you know where things are going. We've, we'll, we'd talk about that in a separate episode, but if you're looking for a new habit, I would make that a habit. Put, put something on the calendar so that once a month you just look at it and see where stuff is going.


Make sure it gets categorized right. So you're looking at accurate data, but, uh, but when you do that, a lot of times you'll just make your own decisions. So I'll, I'll share with you a story of a couple folks that were, they're fairly new planning clients, and so we just started doing this and they hooked up all their, all their accounts to the system. They downloaded it at the end of the first month, they took a look at it and they said, oh my God, we spent a thousand dollars at Wegman's last month. It's just the two of

Speaker 1 (14:10):

Us , and

Speaker 2 (14:12):

We don't eat that much. Yeah. And, and, and what they realized was it was their pattern of buying that did it. And you know, they said, oh, Aldis is my new best friend, and, and now, and you know it, now we sit down on Sundays and we plan out what we're gonna eat for the week. I didn't have to say anything. Right. It's when you start getting oriented to that, when you start looking at it, you make your own decisions. And, and I would just really, really encourage, one of the reasons that resolutions don't work is because we put the word should in there. Mm. And I promise you there's a whole bunch of psychology that, that, that, that has studied this, um, when you say should, it sets up all kinds of bad psychological thing. So if you say, I really should do that, you are not going to do it. I will tell you now, you're not gonna do it because you know, it, you're, you're, it's, it's like the parent talking to the little kid. Right. And so better that you just make choices that you just look at stuff and say, you know, I would rather do it this way. I would rather spend less, or, you know what, I, I think it would be good to plan out our meals for the week because I would rather go to Wegman's once instead of five times a week.

Speaker 1 (15:18):

Oh, totally. And that's, and and you said that and my eyes just lit up because that's exact, that's my life. Yeah. I'm here, I'm at Wegman's or I'm at home. That that's pretty much it. And, and I swear I'm going there every day. Yeah. Or every other day. And I know that I've seen the, I've seen the, the, the stories about that where they're like, that you, it's just a bad thing because how many times you go in and go, oh yeah, let me grab this. You don't need that. Yeah. That impulse buy that you grab, you're like, oh. And, and especially never go shopping when you're hungry. But that's

Speaker 2 (15:49):

A difference story. Yeah. Yeah. Never go shopping when you're hungry and take a list. Right? Yeah. Yeah. If you think about what you want to do ahead of time and make a list and you know what you're going in for, you're less likely. And, and some of that, I, I don't know that I would categorize it as impulse buying, but it's uninformed buying. Like, if you don't know what you're gonna eat through the week and you start composing menus in your head and you buy ingredients that you think you're gonna use, it's probably not gonna work out that well. Mm-hmm. . But if you just sit down and think, okay, we'll have these things on Monday and these things on Tuesday, and you go in with a list, you're less likely to wander down the aisle thinking, what should I buy next? You just look at the piece of paper. And so that even just that level of planning can probably save you a whole lot of money and it'll save you a ton of time because you won't have to be going back to the store all the time.

Speaker 1 (16:33):


Speaker 3 (16:33):


Speaker 4 (16:38):

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Speaker 1 (18:04):

So, resolutions, no reviews. Yes. What's your 30 minute action list, Steve?

Speaker 2 (18:09):

Yeah. Well, so the 30 minute action list gets, gets at the financial, you know, when you do this review, the result of it is to figure out what habits you want to change because you, you buy with habits now, right? You talked about how you shop on Amazon. Mm-hmm. , you do that now because that's how you do it, right? That's your habit. So the question is, when I look at the pros and I look at the cons, what habit do I want to change? And so the 30 minute action list is set aside, set aside half an hour, um, start tracking your expenses and then go through your, spend 30 minutes going through your calendar from last year and look at the events that had a financial impact on you and ask, how does that inform how I make financial decisions and how I would want to change financial habits moving forward.

Speaker 1 (18:57):

Lots to digest there. And it's all very good information because I am the worst with resolutions. So I like changing the mindset about that. That was

Speaker 2 (19:05):

Three. No resolutions.  resolutions, bad

Speaker 1 (19:08):

Resolution, resolutions, bad and review's. Good. We're gonna talk like cave people from, from now on in. Well, thanks for joining us for another episode of 30 Minute Money and you can find, uh, sweshing@focusedwealthadvisors.com. Is that your the, that's the place. That's the place. And, uh, reach out to Steve for any kind of, uh, financial information or just to say hi, cuz he's a super nice guy and we'll be back next time on 30 Minute Money. Thanks for watching.