30 Day Investing Challenge, Day 28: Set Yourself Up For Success
Now that you’ve set your goals, opened your accounts, chosen your investments, and set everything on autopilot you’re on your way to wealth and financial freedom! You’ve done the bulk of the work and have come so far over this past month. The only thing left to do is to set yourself up for success for the long term.
Why Resilience Is Key
There is so much that happens in our lives and staying flexible with your goals and vision is key to making sure your life is exactly what you’ve always wanted. Life gets messy. You may have something huge happen that means you have to change your plans: a layoff, a new job with higher (or lower) pay, having a child (because we know they’re expensive), taking care of an elderly parent, buying a home that needs a lot of work, getting sick or injured, receiving a windfall of money, etc. Because of these changes, the vision for your life may change — and that’s okay! Financial wellness check-ins are a great way to guarantee you’re continually designing and re-designing the life you want to live. Your daily, weekly, monthly, and yearly trackers will help, but it’s also a good idea to review your goals and vision created on day 1 periodically.
Action Step: Create A Financial Wellness Checklist:
For all of your goals, you’ll want to:
Revisit the why of the goal:
Does it still matter to you?
Is it still necessary?
Does it still serve the same purpose as when you first set it?
Look and see if any of the parameters need to change, like timeline or savings rate.
Reexamine the investments you chose for your goal:
Are they still working?
Are they returning what you expect?
Are they allowing you to sleep well at night or are you up worrying constantly (this may indicated you need to lower your risk)?
Make adjustments as needed.
For short term goals I recommend a quarterly check-in; for medium term goals a semi-annual check-in; and for long term goals annual check-ins will suffice.
Revisiting Your Savings Rate
When you first start your investing journey you may be younger or living above your means or have a lower salary, which means your savings rate may be low. That’s okay! It’s best to do what you can in the beginning and build up the skill, habit, and comfort of regularly investing and saving. But once time goes on and you work on your spending, pay down your debt, get a higher paying job, etc. you’ll be able to increase your savings rate. This can be part of the above check-in of course, but there is also a more automated way to do this in your workplace retirement accounts: automatic investing increases.
Action Step: Set Up Automatic Investing Increases
Check to see if your workplace retirement plan has this feature — unfortunately not all of them do.
If it does, sign up to increase your savings each year. If you want to start slow I’d start with increasing it 1%, but you can go as high as you want. You’ll just need to ensure your investment increases don’t go over the annual limit on your investment accounts. Usually you’ll be fine because retirement account limits tend to increase yearly — but it doesn’t hurt to do your due diligence.
Check back in tomorrow for your next challenge: crafting your own investment policy statement.
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